A recent article in The Wall Street Journal by Roland Li spoke to what the author proclaimed to be the unjustly high cost of title insurance in New York State along with alleged abuses being perpetrated by abstract companies!
Now I am not here to justify or question insurance rates set by entities that answer to a higher authority than I do.
But the truth is that most if not all of us face insurance premiums of one type or another whether it’s health, homeowners, auto, life and yes, title.
And who among us hasn’t questioned the size of said premium, particularly since for most types of insurance the coverage is forward looking and of the type that we hope we will never need to use.
For example I have been paying what I believe to be an exorbitant amount of money for life insurance and, because I plan on living forever, these premiums could instead used for something more valuable (although my wife doesn’t necessarily see it that way).
Health insurance has been in the news for the past few years and while I am now paying 50% more than I was for the same coverage I had before, completely understand that if something were to happen medically it’s coverage that I can’t be without.
And through it all what is 100% clear to me is that, if for some reason I die or need hospitalization, that the insurance company with whom I have contracted for coverage has the wherewithal to pay my claim when presented.
That’s why I make sure that whatever insurer that I choose has the claims paying ability I believe to be required in order to ensure that is the case!
It falls into the category of you get what you pay for.
And a buyer of title insurance needs to make sure of the same thing!
Truth be told there are one or two companies in the marketplace who will sell you title insurance at a cost below the premium of say, Chicago Title.
But, at the end of the day what is the expertise of those companies? If a financial crisis on par with the one that hit in 2007 were ever to occur again, how will the underwriters survive the torrent of claims?
Chicago Title has demonstrated its ability to manage through difficult times. Some of the new companies haven’t fully had the same experience. Some title insurers have gone out of business in the past several years.
This raises questions for consumers and for their legal representatives.
Title industry regulation? Bring it on!
As a provider of title insurance Hallmark Abstract Service and other companies like us have a fiduciary responsibility for any transaction that we participate in. We take that responsibility very seriously along with our responsibility to our client.
Any regulation to ensure that all of the firms comply with a certain standard is welcome for us because since our inception Hallmark Abstract Service has always operated on what we feel to be the highest standards both operationally and ethically, on a daily basis.
Are there abuses by some in the title industry? Of course there are just as there are in every field and vocation.
But for every bad actor you have the great majority of firms who do what is right for their clients including making the transaction costs as fair and reasonable as possible!
For any real estate transaction the consumer needs to assemble a group of professionals that they can rely on and trust. If licensing title insurance agents is one way to insure that level of comfort for a property buyer or mortgage refinancer, then bring it on!