|
Vermont Claim Trends
The terms “Claim Expenses,” or “Loss Adjustment Expenses” (“LAE”), are used interchangeably in the title insurance industry to describe the expenses incurred by title insurers in resolving claims from the investigation stage through the claim’s resolution. Some common examples of these expenses include title search fees, surveying work, attorneys’ fees incurred in defending an Insured’s title, and even basic expenses like recording fees.
Because these expenses are coded and accounted for in every state where CATIC operates, we are able to look at this data and extrapolate what types of claims are generating the most claim expense payments in a given state. This data can be helpful in identifying claim trends in your state and raise awareness on what types of issues are a frequent source of claims in your locality.
In Vermont for example, over the last two years (2023-2024), the top four claim types driving claim related expenses have been: 1. Access Issues, 2. Easements, 3. Survey-Related Issues and 4. Fraud.
Although it may be stating the obvious, claim avoidance is in everyone’s best interests. Given that these four claim types occur with frequency in Vermont, it makes sense to have them on your radar and to give these areas greater attention in the transaction.
Access, and whether a property has a legal right of access to a public street, if overlooked, can result in a severe loss to the client and a significant claim. Clients may see visible evidence of access and incorrectly assume the property has a right of access that leads to a public street.
Undeveloped lots, camp lots and old lakeside communities are often a breeding ground for access claims. A little due diligence on this issue can go a long way in avoiding a severe claim.
Easements in the chain of title that benefit or burden a property can be a source of litigation and should be explained to a buyer and properly excepted in the policy. Always review easements from your title report or abstract against the commitment and final policy before issuance and confirm that adequate Exceptions are taken for those known easements.
Survey-related issues can include encroachments, overlaps, unrecorded easements, boundary line disputes and any other facts that an accurate survey and inspection of the land would disclose. Of course, having an accurate survey performed before purchase would eliminate most of these claims. Understandably, many buyers do not want to incur this expense. At a minimum, buyers should be encouraged to walk the property with someone knowledgeable of the boundaries to look for encroachments, rights of way and other issues that may be obvious from an inspection.
Fraud, in the form of wire fraud and seller impersonation fraud, continues to be a real threat to transactions in Vermont. Bad actors have learned how to leverage technology in a way that allows them to be physically distanced from the transaction making these frauds a threat anywhere real estate transactions occur. Fraud claims are almost always severe claims with significant losses. Being aware of the red flags, employing best practices, and utilizing available wire fraud prevention services are critical to preventing these severe claims.
Our agents truly are our “frontline” in claim avoidance. We thank you for your efforts in helping us prevent these claims. Our underwriting staff are here to assist you in navigating these issues.
CATIC Claims Department
We strongly encourage you to review these links to additional fraud prevention resources:
Wire Fraud Prevention Vendors Guide
ALTA Rapid Response for Wire Fraud Incidents
Vacant Land Scams Practice Guide & Underwriting Requirements
Sample Seller Identification Fraud Avoidance Letter
Sample Borrower Identification Fraud Avoidance Letter
FBI Cyber Quick Bytes
| 
