Home >> Encyclopedia Americana, Volume 26 >> Thrace to Topeka >> Title Insurance

Title Insurance

companies, titles and public

TITLE INSURANCE is effected in coun tries having public offices for the record of titles to real estate through the agency of title guaranty companies. This business has as sumed importance in the United States where the system is most fully developed. In this country law requires all transfers of real estate, all mortgages, wills, judgments, etc., to be entered in official registers open to public in spection. In the larger cities these records soon became so voluminous that the matter of verifying title became a cumbersome affair call ing for the prolonged services of expert realty lawyers. Moreover such research was attended with long delay and with great expense; yet this had to be repeated every time a fresh transfer or mortgage took place, since the vendee or mortgagee was not apt to accept the property without assurance of its being un encumbered and sound in title. Finally in 1876 a Philadelphia company was organized to guarantee titles, and the plan proved so suc cessful that companies have since been organ ized in nearly every large city in the country. The plan of operation of these companies calls for large capital, for in order to be independent of the clumsy and sometimes inaccurate meth ods of public record offices the title insurance companies form their own records of real estate titles in the locality in which they oper ate, and must maintain for this purpose a large staff of expert title examiners. On ac

count of the size of its force a well-equipped compaily can make the first examination and guaranty of a title in less than a week, whereas from one to three months was sometimes re quired by the practising attorneys. The fee required in this first instance is usually about the same as that charged by a reliable lawyer, or, in case of a long examination, about one half per cent of the value of the property negotiated ; but it has the added advantage of guaranteeing against loss if there is any inaccuracy of the search. After a property has been once examined and its title guaranteed, the noting of future transactions affecting it is a simple matter, and subsequent guaranties are issued upon short notice and for a small f ee.