Why might a title insurance policy be deemed void?

A title insurance policy can be deemed void if the insured provides false information or conceals material facts during the application process. This principle is grounded in the idea of utmost good faith, which requires both parties in an insurance contract to deal honestly and not misrepresent facts that could affect the insurer's decision to issue the policy. If it is found that the insured withheld pertinent information or provided inaccurate details that would have influenced the title company's assessment of risk, the insurer has the right to void the policy. This helps protect the insurer from financial loss due to undisclosed issues that could affect the title to the property.

In contrast, the other situations do not inherently void the policy. A title company's bankruptcy does not impact the validity of the policies they have already issued, though it may affect claims processing. Selling the property does not void the title insurance, as policies typically remain in effect for subsequent owners and can provide necessary coverage during ownership transitions. Failure to pay the insurance fee on time may lead to a lapse in coverage, but it does not automatically render the policy void if the premium has been paid before the due date.