Can a title company be held liable for a defect in title under a policy of title insurance?

Plaintiffs argue that by reason of these sections they were entitled to presume ownership of the property to the center of the bounding street. (Neff v. Ernst, 48 Cal.2d 628, 635, 311 P.2d 849.) The failure of the title they got to equal the title they were entitled to presume amounted to a defect in title for which they were entitled to compensation under their policy of title insurance, or alternatively, for which they were entitled to damages for negligent misrepresentation.

In defense, the title company initially relies on certain policy exclusions purporting to restrict its coverage to the specific lot described in the policy and to disclaim responsibility for defects in the title to adjoining streets, and the like. We are not impressed with this defense, and we have no hesitancy in finding the title company's blanket exclusions from the coverage of its policy wholly inconsistent with the protection[250 Cal.App.2d 252] which the face of the policy purports to offer. (Steven v. Fidelity & Casualty Co. of New York, 58 Cal.2d 862, 879--883, 27 Cal.Rptr. 172, 377 P.2d 284.) When a title company insures an owner's title to property, by implication it likewise insures the presumed ancillary titles and privileges attached to the property and assumes liability for defects in those titles and privileges. In the present case, for example, if plaintiffs were entitled to presume ownership in fee to the center of the streets adjoining their lot, they were likewise entitled to presume title insurance coverage against defects in title coextensive with their presumed ownership.