When the insured chooses, coinsurance may be undertaken by two or more title insurance underwriters sharing a single-risk in allocated amounts. Each title insurer is responsible for its portion of the liability and, in turn, receives its portion of the title insurance premium. The risk spreading may be from dollar one or in excess of a stated liability amount, and it may be “coordinate and proportionate”, “joint and several” or a combination of the two. Traditionally the benefit of coinsurance is that each title insurer performs a separate title search and examination on the property. The coinsured polices should contain coinsurance language wherein each title insurer’s policy should refer to the other issued policies.
The current trend in coinsurance is for one title insurer to act as the “lead” insurer. In this role, the lead conducts the search and examination, produces the title commitment (or proforma policy) and any endorsements requested. The coinsuring companies review the lead’s documentation and analyze the risk. Once each company’s underwriting requirements are satisfied, a Coinsurance Endorsement (“Me Too”) is issued to the lead’s policy. This method reduces the turn time for commitment/proforma which is helpful in situations with short deadlines.
The insured has direct access to each insurer in the event of a claim. The policy/coinsurance endorsement should reference each insurer’s policy number and the allocation of the risk.