Escrow & Title
In Montana, a title insurance company that discovers a covered title defect after the policy is issued is obligated to:
ACancel the policy and refund the premium
BEither cure the defect (by taking legal action to clear title) or pay the insured for their covered loss up to the policy amount✓ Correct
CNotify the insured and take no further action
DRequire the insured to resolve the defect at their own expense
Explanation
When a covered title defect is discovered, the title insurer must either cure the defect (through litigation, quiet title action, or negotiation) or compensate the insured for their covered loss up to the policy limit. The insurer takes on the burden of resolving the defect.
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