Dear Editor:
I read with
dismay Craig Elmore’s piece in April 14, 2018 Post about the merger between Fidelity
National Financial and Stewart Title.
Instead of addressing the issues that the merger may cause, the main
thrust of the article is to lambast the cost of title insurance in a one-sided
rant replete with mistakes and misstatements.
First Elmore
claims it is, “It’s a kind of insurance designed to defend and compensate
buyers and lenders in case of challenges to the title ownership, involving
records that show who has rightful legal claim to the property.” That is only one thing title insurance
insures for under the policy. It also
provides coverage for unpaid liens, assessments, missed mortgages and mistakes
(deeds with missing witnesses, errors in abstracting, etc.). Also, title insurance does not simply wait
for challenges but will affirmatively take action to fix issues when discovered
by either filing suit or paying compensation.
Elmore also
states that shopping around is fruitless because no simple task to locate
dramatic price differences, as title insurers wearing a whole raft of different
brand names operate in a handful of corporate “families,” implying that
underwriter’s set prices for title premiums.
This is simply false in Florida.
Prices are set by the Florida Department of Insurance, and these fixed
premiums have fallen over 30% against inflation in the last 25 years. Local title agents will compete on price and
may Realtor shop closings to save their customers hundreds of dollars.
Premiums are
rising because the economy is doing better plus prices have recovered from
there dramatic drops, not because the costs of coverage has increased. In fact premiums have not increased at all
since 2011 (or in fact since 1994 in Florida).
Comparing
loss ratios for title insurance to casualty insurance is also without
merit. Buy a home and pay a one-time
title premium for lifetime coverage, or pay more than that per year to cover
casualty insurance. They are simply not
equivalent coverages.
The claim of
the CFA about “huge kickbacks, expensive gifts, and other inducements from the
insurers to real estate professionals” is simply not true for the most part. These activities are illegal in residential
real estate with federally insured loans, and has had no effect or premiums to
“raise the price of title insurance to “absurdly high levels.”
Elmore’s last
fallback is to tout Iowa’s low costs for coverage. What he fails to state is that Iowa has a
government run not-for-profit company that issues policies. I am sure if Florida took over FP&L and
ran it as a not for profit, our electric bills would be cheaper too. What Elmore fails to mention is that if
losses exceed revenue, the taxpayers of Iowa must cover the difference. He also fails to mention that to get that
cheap $110 policy, one must hire an abstracter to abstract title and an
attorney to issue a title opinion.
Abstracts in Iowa costs about $350 and up, (versus $75-125 in Florida)
and title opinions prices vary by attorney.
This is the
second time the Post has run a one-sided article about title insurance. This type of coverage belongs in the editorial
section, not as unbiased business news reporting.
