Can A Title Insurer Avoid All Obligations And Liability By Paying Its Insured Policy Limits?

Past webinars and blog posts have addressed several principles of insurance law in Washington, including: (a) the duty to defend is broader than the duty to indemnify; and (b) an insurer must deal fairly with its insured, giving equal consideration in all matters to the insured’s interests. Title insurance, however, is unique.

Differing from other types of insurance policies, many title insurance policies include provisions stating that the insurer can end its obligations, including any defense obligations, by paying its insured the limits available under the policy. Courts have enforced these types of provisions in title insurance policies for decades. As a result, some title insurance companies have taken the position that they are insulated from all liability by paying the insured the limits available under the policy. Based on a recent unpublished opinion issued by the Ninth Circuit, that may not be true. Quilbillies, LLC v. First Am. Title Ins. Co., No. 25-501, 2026 U.S. App.