Title — continued from Page 48
California Market Share (Sorted by 2009 Market Share)
GROUP # 670 70
340 150
GROUP NAME
Fidelity Nat’l Fin Inc First Amn Title Stewart Title Co Old Republic Grp
50130 North American Title Ins Co 51020 National Title Ins Of NY Inc 50050 Westcor Land Title Ins Co 3889
TransUnion Grp
50026 Commerce Title Ins Co 51632 EnTitle Ins Co Total
The title-insurance market in California
Most buyers of real property use
financing to acquire the property. Under these circumstances, the lender will require the issuance of a title insurance policy. In California, it would be a rare real-estate transaction indeed if no title insurance policy were purchased for the buyer as part of the transaction. Title insurance policies have very low
loss ratios. In other words, there are very few dollars paid out on claims relative to the premiums collected. Most title insurance
2009
48.31 percent 28.94 percent 9.39 percent 6.84 percent 2.10 percent 1.52 percent 1.46 percent 1.12 percent 0.30 percent 0.01 percent
100.00 percent
policies never have any claims submitted against them because almost always if a defect in title is not appended to the policy it also does not appear in the public records. Loss ratios for title insur-
ance nationwide are generally in the 5 percent to 10 percent range. In California in 2010, for example, title insurers col- lected $1.409 billion in premi- ums but only paid $214 mil- lion in claims. Expenses for the
issuance of title insurance policies, however, are higher
than many other types of coverage. Where a homeowner’s policy can be issued with very quick and minimal under- writing, a title insurance policy is among the more expensive for the insurer to issue. It must research all possible defects in title because if it makes a mistake and misses a defect, it will be liable for the diminution in value caused by the defect. In California, the title insurance mar-
ket is highly concentrated. Only twelve companies are presently licensed to sell title insurance in California, compared to 107 companies that are licensed to sell
homeowners insurance. As of 2009, the most recent year for which the California Department of Insurance has published data, the top three companies have 87 percent of the market and the top three have 96 percent:
Damages recoverable in title-insurance cases
Title insurance policies provide cov-
erage for both first-party claims (such as an undisclosed easement that diminishes the property’s value) and third-party claims (where the insured is sued by another relating to the title). Although title insurance has many
unique features, it is still insurance and subject to all of the rules that normally apply in insurance bad-faith actions. A title insurer that unreasonably withholds benefits can be held liable in tort for breach of the implied covenant of good faith and fair dealing. (Egan v. Mutual of Omaha Ins. Co. (1979) 24 Cal.3d 809.) All of the insurance regulations also apply to title insurance companies as they do to any other insurance company. Damages for emotional distress,
Gruenberg v. Aetna Ins. Co. (1973) 9 Cal.3d 566; attorney fees, Brandt v. Superior Court (1985) 37 Cal.3d 813; and punitive
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