Title insurance (California)

Source ledger

4 sources. Every citation number above resolves to a record below. Nothing here sits behind an account.

1. [1]

   California Insurance Code Section 12340.1 (what title insurance is)(opens the original record on California Legislative Counsel (leginfo.legislature.ca.gov))

   California Legislative Counsel (leginfo.legislature.ca.gov)Primary lawPrimaryJurisdiction CALast checked September 6, 2026Updates: Amended only by legislation.ID ca-ins-code-12340-1

   What this source supports (5)

   • Section 12340.1 defines title insurance as insuring, guaranteeing or indemnifying owners of real or personal property, or the holders of liens or encumbrances thereon, or others interested therein, against loss or damage suffered by reason of the matters the section lists.
   • Section 12340.1(a) names liens or encumbrances on, or defects in the title to, the property.
   • Section 12340.1(b) names invalidity or unenforceability of any liens or encumbrances thereon.
   • Section 12340.1(c) names incorrectness of searches relating to the title to real or personal property.
   • Every matter the section enumerates is a state of the title or of a search of it, rather than an event occurring after the policy is issued.

   The last claim is a reading of the enumeration rather than a sentence lifted from it, and is marked as such. The section does not use the words past or future; what it does is list liens, encumbrances, defects, invalidity and incorrect searches, all of which are conditions of title as it stands. That is the structural difference between title insurance and every other line in this corpus, and it is visible in the definition itself rather than needing a secondary source to assert it.

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2. [2]

   California Insurance Code Section 12340.11 (a preliminary report is an offer, not a representation about the title)(opens the original record on California Legislative Counsel (leginfo.legislature.ca.gov))

   California Legislative Counsel (leginfo.legislature.ca.gov)Primary lawPrimaryJurisdiction CALast checked September 6, 2026Updates: Amended only by legislation.ID ca-ins-code-12340-11

   What this source supports (4)

   • Section 12340.11 defines preliminary report, commitment, or binder as reports furnished in connection with an application for title insurance that are offers to issue a title policy subject to the stated exceptions set forth in the reports.
   • Section 12340.11 provides that such reports are not abstracts of title.
   • Section 12340.11 provides that such reports do not constitute a representation as to the condition of title to real property.
   • Section 12340.11 provides that such reports do constitute a statement of the terms and conditions upon which the issuer is willing to issue its title policy, if the offer is accepted.

   This is the provision a buyer is most likely to be wrong about. A preliminary report arrives looking like the result of a search and reads like a description of the title, and the statute says in terms that it is neither an abstract nor a representation as to the condition of title. It is an offer, and the exceptions listed in it are the terms of that offer rather than a list of problems someone has promised to resolve.

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3. [3]

   California Insurance Code Section 12340.10 (what an abstract of title is, and that it is not a policy)(opens the original record on California Legislative Counsel (leginfo.legislature.ca.gov))

   California Legislative Counsel (leginfo.legislature.ca.gov)Primary lawPrimaryJurisdiction CALast checked September 6, 2026Updates: Amended only by legislation.ID ca-ins-code-12340-10

   What this source supports (2)

   • Section 12340.10 defines abstract of title as a written representation, provided pursuant to a contract whether written or oral, intended to be relied upon by the person who has contracted for the receipt of that representation, listing all recorded conveyances, instruments or documents which under the laws of this state impart constructive notice with respect to the chain of title to the real property described therein.
   • Section 12340.10 provides that an abstract of title is not a title policy as defined in Section 12340.2.

   Kept because the contrast is what makes section 12340.11 legible. An abstract is a representation intended to be relied upon; a preliminary report expressly is not. Two documents that look similar to a buyer are on opposite sides of that line.

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4. [4]

   California Insurance Code Section 12413.1 (when escrow funds may be disbursed)(opens the original record on California Legislative Counsel (leginfo.legislature.ca.gov))

   California Legislative Counsel (leginfo.legislature.ca.gov)Primary lawPrimaryJurisdiction CALast checked September 6, 2026Updates: Amended only by legislation.ID ca-ins-code-12413-1

   What this source supports (7)

   • Section 12413.1 provides that no title insurance company, controlled escrow company, or underwritten title company shall disburse funds from an escrow account until the day established by the rules the section sets out.
   • Section 12413.1 permits funds received by cash or by electronic payment to be disbursed following deposit on the same business day.
   • Section 12413.1 provides that deposits carrying next business day availability may be disbursed on the business day following deposit, and that other deposits follow the availability timelines set by federal regulation.
   • Section 12413.1 provides that where funds are received by draft, the company shall not disburse funds from the escrow account with respect to that draft until the proceeds of the draft have become available for withdrawal.
   • Section 12413.1 provides that, with respect to a draft, available for withdrawal means when the draft has been submitted for collection and payment has been received.
   • Section 12413.1 permits recordation before funds are available for withdrawal where the parties have consented in writing beforehand.
   • Section 12413.1 provides that no such company shall be liable for a violation of the section if the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid that error.

   The good funds rule, and the reason a closing does not fund the moment money arrives. Recorded here in the section own terms; the interaction with federal funds availability regulation is referenced by the section rather than reproduced in it, so this record does not state those timelines.

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