Title Insurance Protects the Critical Infrastructure that Underpins the U.S. Real Estate Economy: New Study from First American
—Analysis explains how title professionals help maintain the nation's property records system, protect homeowners' property rights and mitigate hundreds of billions of dollars in potential title risk exposure each year—
First American Financial Corporation (NYSE:FAF), a premier provider of title, settlement and risk solutions for real estate transactions and the leader in the digital transformation of its industry, today published a new white paper examining the essential role title insurance plays in protecting the integrity of the U.S. property rights system and maintaining the critical infrastructure that supports the nation's approximately $5 trillion real estate economy1.
The comprehensive white paper, "How Title Insurance Protects the Critical Infrastructure Supporting the U.S. Real Estate Economy and the Property Rights of Homeowners," explains how the U.S. property records system depends on the combined efforts of local government recording offices and title professionals who search, examine and cure title defects before they become costly legal disputes. The paper details how title insurance serves as both a risk-management tool and a mechanism for maintaining the reliability of the property ownership records that underpin the U.S. housing market and broader economy. The analysis also demonstrates how proposals to waive or replace title insurance shifts risk to homeowners, lenders, investors and taxpayers, and erodes incentives to maintain the quality of the nation's property records.
"Property records are one of the most important forms of economic infrastructure in the United States, yet they are often overlooked and widely misunderstood," said Paul Hurst, chief strategy officer at First American. "Unlike roads, bridges or power grids, this infrastructure is maintained through a partnership between public recorders and private-sector title professionals. In addition to paying claims, title professionals perform the search, examination and curative work necessary for every insured transaction, helping preserve confidence in property rights, support efficient real estate transactions and protect homeowners, lenders and taxpayers from substantial financial risk."
Click here to view the full white paper.
White Paper Overview:
- How the U.S. Property Records System Works, and Why It Depends on Title Insurance
- Why Title Insurance Creates Value Before a Policy is Even Issued
- Title Insurance Economics: Low Claims Are a Feature, Not a Bug
- Title Insurance Waivers Can Weaken Risk Pools and Increase Long-Term Costs
- Title Waivers Primarily Benefit Existing Homeowners
- Refinance Transactions Still Carry Meaningful Title Risk
- Title Insurance Represents a Small Share of Total Homeownership Costs
- Industry Innovation, Competition has Reduced the Real Cost of Title Insurance, While Maintaining Protection
- Reducing Title Protection Shifts Risk, Rather Than Eliminating It
Additional Title Insurance Industry Commentary and Research:
- Title Search Automation: Reality, Risk and Responsibility of Artificial Intelligence: AI can improve speed and workflow efficiency, but accurate title search and decisioning still depend on normalized data, title plant infrastructure, and rigorous validation processes developed over decades. AI alone cannot meet the industry’s standards for accuracy, consistency and reliability.
- The Risk of Not Curating Property Ownership Records: The title insurance industry’s work to maintain accurate and reliable property records mitigates an estimated $600 to $900 billion in risk exposure to home buyers, lenders and other participants in real estate transactions annually.
- Why Misguided Calls to Scrap Title Insurance Would Make Homeownership More Costly and Threaten the Economy: The work done by the title insurance industry to maintain accurate property records is the linchpin of the real estate sector. Upending it would unnecessarily threaten the broader economy and make homeownership even more expensive for American families.
- Missing the Forest for the Fees – An Analysis of the Regressivity and Closing Cost Significance of Title and Settlement Fees: Research points out the inaccurate conclusion drawn from Fannie Mae’s 2021 study of borrower life-of-loan costs and details the more accurate differences in various costs over the life of a mortgage from Fannie Mae’s own updated research in 2022. Title and settlement fees are less than 1 percent of the borrower’s total life-of-loan costs.
1 The National Association of Home Builders (NAHB), using data from the U.S. Bureau of Economic Analysis (BEA), reported that housing's share of U.S. GDP was approximately 16.1% in 2024, equivalent to roughly $4.7–$5.0 trillion annually based on U.S. GDP.
Disclaimer
Opinions, estimates, forecasts and other views contained in this page are those of First American’s economists and other researchers, do not necessarily represent the views of First American or its management, should not be construed as indicating First American’s business prospects or expected results, and are subject to change without notice. Although the authors attempt to provide reliable, useful information, they do not guarantee that the information is accurate, current or suitable for any particular purpose. © 2026 by First American. Information from this page may be used with proper attribution.
About First American
First American Financial Corporation (NYSE:FAF) is a premier provider of title, settlement and risk solutions for real estate transactions. With its combination of financial strength and stability built over more than 135 years, innovative proprietary technologies, and unmatched data assets, the company is leading the digital transformation of its industry. First American also provides data products to the title industry and other third parties; valuation products and services; mortgage subservicing; home warranty products; banking, trust and wealth management services; and other related products and services. With total revenue of $7.5 billion in 2025, the company offers its products and services directly and through its agents throughout the United States and abroad. In 2026, First American was named one of the 100 Best Companies to Work For by Great Place to Work® and Fortune Magazine for the eleventh consecutive year. More information about the company can be found at www.firstam.com.
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