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Title underwriters and title agents play different roles

Posted on September 7, 2018

Buying a home is a significant financial move. Most people are making a huge investment when they seal the real estate deal. According to Zillow, the median home value in the U.S. has increased by $16,000 over the last year. It’s safe to say that homeowners have a lot at stake when it comes to protecting their property.

Title insurance is an extremely important part of the purchasing process. It minimizes potential liabilities that property owners might undercover years down the road. From an insurance standpoint, this is an excellent option.

However, buying a house is a complex process. You are dealing multiple parties, such as a real estate agent, bank, lawyer, property seller and more. Therefore, it’s important to have a basic understanding of who you might be in contact with. A title insurance company and title insurance agent are two entities that oftentimes get confused.

A title insurance company has your back

The title insurance company, also referred to as a title underwriter,assumes the financial risks involved in a real estate closing. These companies directly authorize, underwrite and issue title insurance to purchasers. A title underwriter possesses skills unique to their profession, which includes:

  • Expertise about the law and how it applies

  • Analyzing risks associated with a transaction

  • Expertly judging the probability of the risks

  • Keen knowledge of a title insurance policy

A title insurance agent investigates

The title insurance agent, also known as the title company, is a subcontractor that represents the title company in a real estate transaction. They attend the closings on behalf of the title company. Essentially, they are oftentimes an agent for the underwriter. Their role and responsibilities differ from that of a title company’s, which includes:

  • Examining property records

  • Determining rightful ownership

  • Investigating possible liens, easements or encroachments

A title company is important because it stands behind the title policy and insures the property against possible insurance defects. On the other hand, a title agent does not represent title holders in court.

A title insurance company and a title agent can work together, or they might act separately. The Missouri Department of Insurance regulates both entities. Homebuyers can pick and choose which title agent or title company they want to work with.