3.24 Coinsurance


Coinsurance With Other Title Companies

Coinsurance among title insurance companies means the act of two or more title insurance companies each issuing separate title insurance policies insuring the same insured in regard to the same interest in land. Each policy specifies the dollar amount of liability assumed and the specific circumstances under which it arises. The sum of the amounts of insurance under each of the policies is the total coverage afforded to the insured.

Any policy subject to co-insurance must contain the co-insurance clause set out in Rule P-6.

The Aggregation Endorsement may be used to combine the policies issued by two separate title insureres to provide the insured lender with a unified policy amount. 


See also Texas Bulletin TX2014003 and TX2015001.


Coinsurance With Insured

Section 7(b) of the Conditions and Stipulations of the owner policy contains a coinsurance clause. The intention of this clause is to require an insured, if inadequate insurance is purchased, to become a coinsurer. Coinsurance has been commonly provided in almost all forms of insurance and is generally recognized as an appropriate element in risk spreading which is the most fundamental concept of insurance. An owner would become a coinsurer if the property is insured for less than 80% of its value, the full consideration, or if the property is improved to the extent of 20% of the value over the amount insured.