ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

The Title Insurance Industry

Updated on June 13, 2014
Fourth and Main in downtown Santa Ana
Fourth and Main in downtown Santa Ana | Source

Like many other industries, title insurance was born of necessity — in this case, the need to protect owners of real estate from challenges to their property titles. During the first century of our nation’s history, Americans became all too familiar with land title troubles. In real estate transactions, the name of the game was caveat emptor — “let the buyer beware.” The ultimate
responsibility for verifying the validity of a land title was the burden of the buyer. As a result, many lost their investments.

It wasn’t until 1868 that the problem drew public attention in the Pennsylvania Supreme court case of Watson v. Muirhead. After losing his investment at a sheriff’s sale as a result of an outstanding prior lien, Muirhead sued his conveyancer.The conveyancer had uncovered the lien, but represented the title as clear after an attorney advised that the lien was not valid.

Supreme Court 1860's
Supreme Court 1860's | Source

The court eventually ruled that conveyancers and attorneys could not be held liable for erroneous opinions based on professional standards of evaluation, and Muirhead lost his investment. As a result of the case, it became clear that something was needed to protect innocent investors from similar hazards and to encourage land development and American growth.

From its beginning in 1876 until the 1920’s title insurance was more or less local in nature, in that title companies confined their insurance activities to insuring properties in the county in which the company was located and in some cases in contiguous counties. The examination of title was made by employees of the company and usually from a title plant operated by the company.

Title Insurance Protection

Here are some hidden risks that title insurace protects against:

  • Invalid Transfer Deeds
  • Forged Deeds
  • Fraud
  • Unrecorded Easements
  • Signed Deed by Person of Unsound Mind
  • False Impersonation
  • Undisclosed Heirs

An expansion in the title insurance industry took place virtually throughout the country from the 1920’s to the late 1940’s with the title work being done by local attorneys, or by agency companies which were in the abstract business.

Four companies emerged from the World War II era doing a restricted “National” business. It would be more accurate to say that these companies were doing regional business in the late 1940’s. They were Lawyer Title Insurance Company, Louisville Title Insurance Company, Kansas City Title Insurance Company and the Title Insurance Company of Minnesota
(Old Republic National Title Insurance Company).

In the years subsequent to World War II, a large number of companies which had restricted their operations to local or state-wide insurance began attempting to spread their operations by qualifying first in adjoining states where business opportunities seemed to be the greatest. By 1957, there were approximately 150 companies writing title insurance, 31 of which were licensed in two or more states.

There are laws in every state except Iowa which permit licensing of title insurers upon compliance with applicable state statutes. In most states, title insurance is under the supervision of the State Department of Insurance. Forms of policies are required to be filed in some states and the coverage afforded thereby approved. Title insurance rates and other charges are regulated by some states, in the state of Texas, the insurance Department, rather than the companies, promulgates rates and policy forms, and prescribes underwriting practices in considerable detail.

The emergence of organizations such as F. N. M. A. (Federal National Mortgage Association) served to both stimulate business and to standardize the basic forms of coverage in most states. The American Land Title Association worked closely with lender counsel groups to develop the most popular policy form - the ALTA Loan Policy. In many states, it is common practice to insure the lender but not the owner or purchaser.

The majority of states now limit title insurance companies to a “single line” and do not permit them to issue other types of insurance (property, casualty, life, health, surety, bonds, mortgage guaranty, etc.) In the 1930’s, many title insurers which were also guaranteeing the payment of mortgage loans became insolvent as a result of claims under the guarantees and state legislatures passed these “single line” requirements to prevent a reoccurrence. All states now prohibit the transaction of title insurance without a license.

Some states have prohibited rebates or discounts for more than 30 years. Others prohibit title companies from the practice of law and/or conveyancing. The competition in the title insurance industry has been fierce over the past 20 years. Consolidation of a number of title agencies into national title insurance companies, affiliated business arrangements, joint ventures and
the expansion of new players into the vendor management arena has created an industry in the United States with title insurance premium revenues over 12 billion dollars.

Through direct operations and independent title agencies, the title insurance industry customers today include:
· Residential and Commercial real estate buyers and sellers
· Attorneys
· Real estate brokers and agents
· Appraisers
· Surveyors
· Investors
· Mortgage brokers and bankers
· Relocation management companies
· Pension funds and investment managers
· FNMA (Federal National Mortgage Assn – “Fannie Mae”)
· FHLMC (Federal Home Loan Mortgage Corp – “Freddie Mac”)
· HUD (Housing and Urban Development)
· FHA/VA (Federal Housing Administration)/(Veterans Administration)
· GNMA (Government National Mortgage Association)

Who knows where title insurance industry will be in the next 20 years?

© 2014 TomRy


    0 of 8192 characters used
    Post Comment

    No comments yet.


    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at:

    Show Details
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the or domains, for performance and efficiency reasons. (Privacy Policy)
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)