Introducing The Concept of Grading Insurance

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Posted By: jackgoodman

My initial reaction to the above was when I read this statement: "...within a three year time period it is discovered that the card had been altered..."

Right now, it is sometimes difficult to tell if a card has been trimmed, miscut or just poorly produced at the time of printing. Except for obvious alterations like coloring and the like, everything else could be classified "an opinion" and the insurance would never pay off. You can bet the insurer will have a staff of "experts" to make that determination and if you disagreed with their "decision," you would have to go to court. An even less favorable venue.

I'm in the mortgage industry and we require title insurance to insure the priority of one lien over another. When it is discovered that there was an error or a problem in clean title, the title company doesn't simply make good and pay off the lender, they make the lender jump thru hoops to resolve the issue themselves and then, when the lender is able to finally prove an "absolute" amount of a loss, the title company will come in and "make the lender whole" by paying them the difference. Not quite the simple system "insurance" would lead you to believe happened.