Though considered to be “[o]ne of the most litigated clauses in standard title insurance policies,” New Jersey courts have not devoted significant time to interpreting Exclusions 3(a) and 3(b) of the standard title policy promulgated by the American Land Title Association (ALTA). Joyce Palomar, 1 Title Ins. Law §6:10 (2015 ed.). These exclusions bar coverage for title defects “created, suffered, assumed or agreed to by the Insured Claimant” or “not Known to the Company, not recorded in the Public Records at Date of Policy, but Known to the Insured Claimant and not disclosed in writing to the Company by the Insured Claimant,” respectively.
This article will discuss the general applicability of these exclusions to title claims and focuses on their applicability in the recent Appellate Division decision of Carrington v. Chicago Title Ins. Co. (N.J. App. Div. Nov. 6, 2015). There, though the court focused primarily on Exclusion 3(b), both exclusions were addressed and deemed sufficient to bar coverage.
Exclusion 3(a)
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