Title Industry Group ALTA Claims Title Fraud Cases Have Increased By 20% Since 2013 Costing Insurers $4.4 Billion

ALTAALTA is reporting title fraud and forgery claims make up 20% of all insurance claims over the past decade. ALTA aka the American Land Title Association refers to a study they commissioned by Milliman.

Title insurers recorded 203,181 claims for policies written during 2013-2022. Title insurers also paid out $4.4 billion in claims related to losses and loss expenses.

The costs associated with fraud related claims represent 21% of that total. On average, fraud and forgery claims cost title insurers more than $143,000 per case. All other claims cost an average of $26,328.

The study examined 127,000 claims associated with policies issued between 2013 and 2022. 

The analysis divided claim types into 11 categories. The most common category was “basic risk.” 

This category accounted for 24% of all claims. It included things like fraud, forgery, undisclosed heirs, marital rights and competency.

Other categories included “special risks” which made up 13.7% of all claims. These include things like mechanics’ liens and subordination of underwritten risks. In addition to escrow and closing procedures.

This also includes improper instructions and improper payments. It also includes failure to make a payment and failure to complete post-closing responsibilities.

The rest of the analyzed claims were either apparent non-covered claims or title company claims. In addition to taxes and special assessment claims. 

In addition to being the costliest expenses for title firms, fraud and forgery claims are also on the rise. Between 2013 and 2020, they represented 19% of all claims between 2013 and 2020. The report also states that insurance claims  rose to 44% in 2022 alone.

Milliman found that 30% of all title losses and claims expenses could not be uncovered by a public records searches.

Write A Comment

Your email address will not be published. Required fields are marked *

Ready to get started?

Speak to a specialist at (888) 737-6344

Translate »