As policymakers keep searching for ways to make homebuying more affordable — including expanding programs that waive title insurance on certain loans — one of the country's largest title insurers is pushing back with data. And the data is striking.
This week, First American Financial released an 18-page white paper, "How Title Insurance Protects the Critical Infrastructure Supporting the U.S. Real Estate Economy and the Property Rights of Homeowners." Its central argument is simple but important: waiving or replacing title insurance doesn't make title risk disappear — it just transfers that risk to lenders, homeowners, investors, and ultimately taxpayers.
Title insurance is infrastructure — not a fee
First American makes a point that's easy to overlook: the U.S. property records system is economic infrastructure, on par with roads and power grids — and it's maintained by a public-private partnership.
Every time a title professional searches records, clears a defect, or corrects an error before a loan closes, they're keeping that infrastructure clean. Weaken it, and the cracks don't show up immediately — they show up years later, in someone else's transaction.
The most important work happens before a claim is filed
Here's the insight that reframes the whole debate. Critics point to title insurance's low claims ratios as proof it provides little value. First American argues the opposite is true.
Unlike auto or health insurance, title insurance is built around "curative" work — title professionals find and fix problems before the loan closes. Undisclosed liens, ownership disputes, legal-description errors, recording defects: these get resolved up front, so they never become claims at all.
In other words, low claims aren't a sign the product is unnecessary — they're a sign it's working exactly as designed. You don't see the disaster that was quietly prevented.
The numbers policymakers should think about
That last point matters: you'd be trading away durable, decades-long protection to save a sliver of one percent. First American's analysis, drawing on Fannie Mae research and its own data, concludes that reducing or eliminating title insurance would have only a modest effect on affordability while increasing financial risk throughout the mortgage system.
This is exactly what we do for you.
Behind every clean closing is the quiet work First American describes — a careful title search, defects found and cured before you sign, and a real owner's title policy that protects your ownership against fraud, forgery, liens, and errors for as long as you own your home. Buying, selling, or refinancing in Florida? Close with the protection an algorithm can't replace.
"Refinances are low-risk" — the assumption that doesn't hold
Much of the push to waive title insurance focuses on refinances, on the theory that a recently-purchased home has little new title risk. First American challenges that directly. Plenty can change after a loan is originated: fraud, ownership changes (divorce, death, transfers), legal-description errors, undisclosed liens, and recording defects. A homeowner who took out a second mortgage, fell behind on an HOA, or had a contractor record a lien can have a very different title picture than they did at purchase — and both borrower and lender are exposed if no one looks.
AI helps — but it can't replace judgment
The report also tackles technology head-on. First American agrees AI can improve search speed, workflow, and data processing — and the industry is adopting it. But it draws a firm line: technology cannot replace the title examination, legal analysis, and defect-curing required to establish clear ownership before closing. A model can flag patterns. It can't interpret an ambiguous legal description, negotiate the release of a stale lien, or make the judgment call that clears a cloud on title.
The bottom line
The takeaway isn't complicated: cheaper isn't always safer. As title-waiver programs expand, the smartest move is to understand what protection you'd be giving up — and to work with a title partner who does the curative work that prevents problems instead of leaving you to discover them later. Title insurance is a one-time premium that protects you for as long as you own your home. Measured against a six-year-plus claims tail and up to a trillion dollars in systemic exposure, that's not a junk fee. It's cheap insurance on the largest purchase of your life.
Frequently Asked Questions
If title claims are rare, why do I need title insurance?
Because the rarity is the point — title professionals fix most problems before closing, so they never become claims. The protection is in the prevention, plus coverage for issues that surface later (often years later).
Are refinances really risky enough to need title work?
They can be. Liens, ownership changes, and recording errors can appear after you bought the home. A title search catches them before they become your problem.
How much does title insurance actually cost?
Roughly 42 basis points of the home's value — less than 1% of your total life-of-loan housing costs — paid once, for protection that lasts as long as you own the property.
Can AI replace title examination?
First American argues no. AI speeds up search and data work, but it can't replace the legal analysis and defect-curing needed to establish clear ownership before closing.
General information, not legal advice. Figures are drawn from First American's white paper. Your title agent and, where needed, an attorney can confirm specifics for your transaction.
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