An unwavering commitment to protecting Americans’ property rights

The housing market had a tumultuous year, marked by low inventory and high interest rates, pushing prices higher file levels. Potential starters hope this will change by 2025, and while there are some predictions their ability to enter a home more easily will depend much on the economic landscape and policy priorities of a new Trump administration and Congress.

This is a crucial time for the real estate industry, and in particular the insurance industry. Title companies play a crucial role in the homebuying journey. Looking ahead to 2025, our focus will be on emphasizing the importance of title insurance as the strongest protection of Americans’ property rights, educating consumers about property insurance and continuing to adapt and innovate to help our industry serve consumers more effectively.

The journey to homeownership can be daunting for potential buyers, and the last thing a new homeowner wants to worry about is a title problem that threatens their homeownership.

The simple fact that a house is for sale is not a definitive sign of clear title; There may be a previous defect that has not yet come to light, or there may be a new defect that the current owner/seller does not even know exists. A title insurance professional can remove any uncertainties and provide protection against hidden risks or liabilities. With a clear title in hand and insurance to cover unforeseen risks, the real estate transaction has the green light to proceed.

Title insurance provides an extraordinary level of protection for homeowners. If a tax lien or other claim arises on their property, the policy will cover any legal costs incurred defending that claim. Homeowners with title insurance policies are covered in another important way: through state regulations that oversee industry practices and rates, and federal regulations that require title companies to disclose fees at closing to the homebuyer.

This is not the case with less protective alternatives, such as attorney opinion letters, which do not provide the same protections and guarantees of title insurance, provide more limited coverage of potential risks, and require only a cursory search of public records. These letters have been around as long as title insurance policies, but they are riskier. For example, if a title issue does arise, there is no “duty to defend” and the homeowner must fight the claim themselves.

It is important that consumers are aware of these differences, whether they are purchasing a home, waiting for the housing market to improve, or have decided to refinance their current home.

Even though we live in a digital age, it is important that consumers understand that only 70% of public records are digitized. Seasoned title professionals are adept at thoroughly searching the public records for title defects; they dive deep into both physical and online land, divorce and bankruptcy records, as well as deeds and financial judgments. Most importantly, title insurance is a one-time benefit that also protects homeowners against any “hidden” property risks that might arise later.

Thanks to innovation in the industry, the cost of title insurance coverage has fallen 5% over the past five years. The industry has embraced emerging technologies to improve and streamline their operations, including remote online notarization, giving consumers the ability to complete a transaction without leaving the safety of their home. Title companies have also embraced technology 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 uncertainties 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 staff and its owners.

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