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E & O Coverage - Smitty Strickland/SC
2/17/2006 5:39:26 PM (1810 views)

[+] Al Gore - Kurt deVries/FL (19 replies)
2/17/2006 3:20:58 PM (2478 views)

[+] Jana Urban-Buzek - Wanda Steudel/OH (4 replies)
2/17/2006 9:47:31 AM (2533 views)

[+] Requesting TPL input (not my field of expertise) - Christine Patnaude/NJ (5 replies)
2/16/2006 8:41:23 PM (2612 views)

[+] County Clerk Victim of I.D. Theft - David Bloys/TX (1 reply)
2/16/2006 8:58:31 AM (3475 views)


Real Title Services


[+] ashamed of ourselves - Deborah Manion/VA (10 replies)
2/14/2006 5:16:00 PM (2361 views)

[+] off topic...death of a teenager.... - Loretta Reed/MD (9 replies)
2/12/2006 9:57:50 PM (2316 views)

Mobile Closing Resources - L ROLAND/CA
2/10/2006 1:54:34 PM (1753 views)

[+] Reply to Invasion of Privacy Post - David Bloys/TX (9 replies)
2/10/2006 11:31:19 AM (3224 views)

[+] Uh huh! What happened?Need Help - Donna Grady/NC (8 replies)
2/9/2006 11:14:33 PM (2323 views)

[+] Invasion of Privacy - Donna Grady/NC (1 reply)
2/9/2006 9:57:49 PM (2147 views)

[+] Nationwide App. Outsourcing? - NA/FL (14 replies)
2/9/2006 6:10:41 PM (2531 views)

[+] Stewart Title of India - Ricky Farrow/FL (20 replies)
2/8/2006 6:54:38 PM (3910 views)

[-] Error Rates - Lynn Hammett/SC (5 replies)
2/8/2006 3:16:43 PM (2264 views)
Re: Error Rates - George Booth/OH
2/8/2006 5:50:08 PM (4358 views)

Here is a little information in regards to your question. It is a rather broad interpretation that does not isolate the causes of errors, but which resulted in a payout.

Industry profitability

The title insurance industry is a profitable one. In 2003, according to ALTA, the industry paid out about $662 million in claims, about 4.3% percent of the $15.7 billion taken in as premiums. By comparison, the boiler insurance industry, which like title insurance requires an emphasis on inspections and risk analysis, pays 25% of its premiums in claims.

Comparing claims with premiums tells only part of the story, since, for example, title insurance companies have marketing expenses not incurred by the boiler insurance industry. But the industry's profitability is also hinted at by the repeated instances of state regulators uncovering cases where title insurers have engaged in illegal marketing tactics. Although owners are free to shop around for title insurance, many owners defer such decisions to lenders or real estate agents, and title insurance companies have sometimes used illegal tactics in marketing to those decision-makers. Illegal tactics noted in a CNN/Money article include kickbacks, free vacations, and the free use of office space and equipment. The article noted that in 2005 alone over a dozen title insurers settled with regulators for tens of millions of dollars over these practices.

Further evidence of the industry's profitability can be found by comparing the title insurance costs in the 49 states where such insurance is issued with the costs associated with the state-run Title Guaranty Program in Iowa, where title insurance is illegal. The program is run by the Iowa Finance Authority. It costs $110 for up to $500,000 in coverage in the state; after adding costs for the services of an abstractor (who does the research on the property) and the legal fees, such a title guaranty costs about $400.00, versus the $1,100.00 paid for that same home in other states (based on figures cited by the Iowa Bar Association).

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Re: Error Rates - Lynn Hammett/SC
2/8/2006 6:38:55 PM (2914 views)
Re: Error Rates - Robert Franco/OH
2/9/2006 11:42:41 AM (2959 views)
Re: Error Rates - Lynn Hammett/SC
2/9/2006 2:43:00 PM (2934 views)
Re: Error Rates - Robert Franco/OH
2/9/2006 5:01:16 PM (2843 views)

[+] Policy Writing - George Booth/OH (7 replies)
2/8/2006 11:54:01 AM (2224 views)


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