Quick Answer
The proposed insured is the person or entity the title insurer expects to insure under the contemplated policy, provided all requirements are satisfied. This name will appear on the final title insurance policy once the transaction closes.
When you open a title commitment, one of the first items on Schedule A is the proposed insured. This seemingly simple entry carries important implications for your coverage and the accuracy of your transaction.
Who Can Be a Proposed Insured
The proposed insured can be an individual, multiple individuals (such as joint tenants or tenants in common), a trust, an LLC, a corporation, a partnership, or another legal entity. The name must exactly match how the property will be titled at closing.
Why Is Accuracy Important
The name on the commitment must match the name on the deed and other closing documents. If the proposed insured is listed as "John Smith" but the property will actually be owned by "The Smith Family Trust," the commitment needs to be corrected. A mismatch could affect coverage under the final policy.
Does Proposed Insured Mean Coverage Already Exists
No. The commitment is a promise to issue a policy once all requirements are satisfied. The "proposed" label is important: coverage does not begin until the policy is actually issued after closing. For the full timeline, read When Does a Title Commitment Become a Title Policy?
What If the Name Is Wrong
If the proposed insured name is incorrect, contact your title company immediately. A corrected commitment may be issued. The final policy must reflect the correct insured name to provide proper coverage.
For more on what else appears on Schedule A, read Understanding Schedule A of a Title Commitment.
Key Takeaway
The proposed insured is who the title company expects to insure. Verify the name matches your legal identity and how you will hold title. Correct any errors before closing.
FAQs
Can there be more than one proposed insured?
Yes. Multiple buyers can be listed as proposed insureds, such as spouses buying as joint tenants or partners buying as tenants in common.
Is the proposed insured the same as the vested owner?
No. The vested owner is the current owner (typically the seller). The proposed insured is the future owner (typically the buyer). They are different entries on Schedule A.