An unwavering commitment to protecting Americans' property rights
It was a tumultuous year marked by low and high interest rates that drove housing prices to record highs. Potential first-time buyers hope that changes in 2025, and while there are some who may find it easier to get into a home, much will depend on the economic landscape and policy priorities of the new Trump Administration and Congress.
This is a crucial time for the industry and the insurance industry in particular. companies play an important role in the home buying journey. Looking to 2025, our focus will be to highlight the importance of title insurance as the strongest protection for Americans' property rights, educate consumers about title insurance, and continue to adapt and innovate to help our industry serve consumers more effectively.
The journey to home ownership can be difficult for potential buyers, and the last thing a new home owner wants to worry about is a title issue that threatens their home ownership.
That the house is for sale is not a definitive sign of clear title; it may be a previously undiscovered defect, or it may be a new defect that the current owner/seller didn't even know existed. A general insurance professional can remove any uncertainty and protect against hidden risks or liabilities. With a clear title in hand and insurance to cover unforeseen risks, a real estate transaction is given the green light to proceed.
Property insurance provides an extraordinary level of protection for homeowners. If a tax lien or other claim arises against their property, the policy covers any legal fees incurred to defend against that claim. Homeowners with title insurance policies are covered in another important way: state regulations governing industry practices and rates and federal regulations requiring title companies to disclose fees at home buyer closings.
This is not the case for less protective alternatives, such as attorney opinion letters, which do not provide the same protections and safeguards as legal insurance, offer more limited coverage of potential risks, and perform only cursory checks of public records. These letters have been around for a long time as title insurance, but they are much more risky. If a title issue arises, for example, there is no “duty to defend” and the homeowner has the right to fight the claim on their own.
It's important for consumers to be aware of these differences, whether they're buying a home now, waiting for the housing market to improve, or deciding to refinance their current home.
Despite living in the digital age, it is important for consumers to understand that only 70% of public records are digitized. Experienced title specialists are skilled in conducting comprehensive searches of public records looking for title defects; they delve into both physical and online territory, divorce and bankruptcy records, as well as deeds and financial judgments. And most importantly, title insurance is a one-time payment that protects homeowners from any “hidden” property risks that may arise later.
Thanks to industry innovation, the cost of title insurance has fallen 5% over the past five years. The industry has embraced emerging technologies to improve and simplify its operations, including remote online notarization that allows consumers to close a transaction without leaving the safety of their home. Title companies have also adopted technological tools to better communicate with consumers and operate more efficiently. Moving forward, the title industry will continue to explore new ways to make homeownership more accessible through innovation.
There are many unknowns about what the housing market will look like in 2025, but one thing is certain: the insurance industry will continue our unwavering commitment to protecting Americans' property rights.
Richard Welshons is the president of ALTA.
This column does not necessarily reflect the opinion of HousingWire's editorial department or its owners.
To contact the editor responsible for this piece: .
