In keeping with the tradition of this blog, I give you the latest “scam” (?) in the insurance industry: Title insurance! Forbes, Inc. has recently posted an article that details the obsolescence of title insurance. In this well-written article, Forbes claims that title insurance is a thing of the past and is now nothing more than a cash-cow for title insurers.
Click here for the text of the article
If you have ever purchased a home, you are aware of title insurance and its theoretical protection. Here’s the theory…if you purchase a home, you would expect to get “clear title” to that home. Liens or encumbrances on the property should be listed on the title report, and the insurance that you purchase guarantees that the title will be “clear” upon transfer to the new purchaser. Title insurance was great, oh, 100 years ago when scam artists tried to sell property that did not belong to them to unsuspecting buyers.
The old-school need to protect property buyers through title insurance is pretty much a thing of the past. Title insurance is still here, but the ability to sell a home that you don’t own is near impossible given the world of computers and digital databases housed in all parts of the country that keep track of titles on real property. Read the article…it’s interesting!