The purpose of title insurance is to protect the transferee of real estate from the possibilities of loss through defects that may cloud the title. First National Bank v. Stewart Title Guaranty Co., 279 Ill. App.3d 188, 192 (1996). The title insurance policy insures against defects or clouds in the title to the land, not the land itself.
¶ 79 "The purpose of title insurance is to protect a transferee of real estate from the possibilities of loss through defects that may cloud title." First National Bank of Northbrook, N.A. v. Stewart Title Guaranty Co. , 279 Ill.App.3d 188, 192, 215 Ill.Dec. 913, 664 N.E.2d 310 (1996). However, title insurance does not provide coverage of the loss of value to the land itself.
¶ 11 The purpose of title insurance is to protect a transferee of real estate from the possibilities of loss through defects that cloud title. First National Bank of Northbrook, N.A. v. Stewart Title Guaranty Co., 279 Ill. App. 3d 188, 192 (1996). The policy insures against defects in the title to the land, not the land itself.
Next, First American argues that as an assignee, Shamrock is subject to the same defenses First American would have against Meridian. As neither Meridian nor Shamrock relied on the Title Commitment or Title Policy when approving the Great River Loan and/or entering the Participation Agreement, First American argues it has no liability under the Title Policy to Shamrock. See First Nat'l. Bank of Northbrook, N.A. v. Stewart Title Guar. Co., 664 N.E.2d 310, 314 (Ill. App. 1996). In support, First American argues Tomer told Rench, president and CEO of Meridian, about the "Possibility of Reverter," and also that Winfield and Peggy Stillwell had "direct knowledge" of its existence.
Markel International Insurance Co. v. Montgomery, 2020 IL App (1st) 191175, ¶ 37. Further, the" 'purpose of title insurance is to protect a transferee of real estate from the possibilities of loss through defects that may cloud title.'" Wade v. Stewart Title Guaranty Co., 2017 IL App (1st) 161765, ¶ 79 (quoting First National Bank of Northbrook, N.A. v. Stewart Title Guaranty Co., 279 Ill.App.3d 188, 192 (1996)). A "title insurance policy insures the title against defects, which may damage the insured's interest in the property."
Moreover, the purpose of title insurance is to protect a transfer of real estate from the possibilities of loss through defects that may cloud title. See, e.g., First National Bank of Northbrook, N.A. v. Stewart Title Guaranty Co., 279 Ill. App.3d 188, 192 (1996). In this case, Hershenhorn's claims are not made against plaintiffs because defendant failed to find an unrecorded easement.
General principles of insurance contract interpretation provide that such contracts should receive a practical, reasonable, and fair construction consonant with the apparent object and intent of the parties, viewed in light of their purpose. First National Bank v. StewartTitle Guaranty Co., 279 Ill. App.3d 188, 193, 664 N.E.2d 310 (1996). As with any insurance policy, courts are not to distort the language of the title policy to create ambiguities in order to rewrite the policy.