It seems as though title insurance is becoming more and more a casualty line of insurance.  This is a double edged sword that could be a very damaging trend for the title insurance industry.  On one hand, it makes the job easier for the underwriters and title agents - if they don't have to do the title search they save time and money upfront.  We have already seen the search standards reduced to bare minimums and in some cases eliminated.  Mortgage impairment insurance doesn't even require a search.  It has been hypothesized that one day all you will need to issue title insurance is a copy of the legal description and a credit report. 

On the other hand, once it has been reduced to a risk based insurance every insurance agent will be able to issue the coverage.  Imagine if the bank could just ask State Farm, or Nationwide, for a Title Rider on the home owners policy and the premium would be built into the hazard insurance premium.  There would be no upfront cost to the consumer - it would just be a few dollars added to the monthly premium and the bank could close the loan the same day.

Claims will without a doubt rise dramatically, but it seems as though the title insurance underwriters have already accepted that risk in many situations.  So, if it works for the title industry, I'm sure that the casualty insurance companies would be able to assess the risks and make the same decisions. 

Best of all, for the consumers who refinance often they wouldn't have to pay for title insurance each time because they would have a rider that covers the risk. 

Just a thought...

Best,
Robert A. Franco
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