Average loss on a DC title policy is $639

A recent Demotech study may reveal yet another reason for homebuyers to obtain owner’s title insurance – especially if you are buying a home in the District of Columbia.

Title insurance companies take a loss of $215 on average in Maryland and $165 in Virginia, according to the study. In the District of Columbia the average loss is $639 for every title policy issued.

Put another way, if the homebuyer had not obtained owner’s title insurance, these figures possibly represent the average amount of loss suffered directly by the homebuyer.

Among the three jurisdictions, title insurers of District properties suffer the highest loss per policy issued. In fact the District of Columbia has the highest loss rate in the country, which may explain why District title insurance premiums remain among the highest in the country.

On average, a DC homebuyer pays $2,800 in title insurance premiums. Of the $2,800 in premium, $639 is paid out in claims and losses suffered by the title insurance underwriter.

Below is a more detailed breakdown, by jurisdiction and title insurance underwriter, of the loss ratios:

Maryland

• First American wrote 25 percent of the policies and paid $22 million in losses (48 percent of the state total; $409 loss per policy).

• Chicago (15 percent), Fidelity (13 percent), Old Republic (13 percent) and Stewart (13 percent) rounded out the top 5 in policies written.

• Chicago stood out from that pack in losses paid with $10.5 million — 23 percent of the losses in the state.

• Overall, Maryland had a $215 loss per policy.

• 85 percent of the policies were from non-affiliated agents; nearly 10 percent came from underwriter-affiliated and 5 percent came from direct shops.

Washington, DC

• 26,211 policies were written and split among 16 different underwriters.

• First American led the way with 51 percent, followed by Chicago with 11 percent and Stewart with 11 percent.

• Paid losses piled up to nearly $17 million — $639 loss per policy.

• First American led the way there too with 65 percent of the total ($11 million, $817 loss per policy). They were followed by Chicago at 14 percent ($2.4 million, $859 loss per policy) and Stewart at 13 percent ($2.2 million, $803 loss per policy)

• 87 percent of policies come from non-affiliated agents; 7 percent from underwriter-affiliated agents and 6 percent from direct agents.

Virginia

• 321,450 policies written statewide.

• First American wrote 24 percent, followed by Fidelity with 21 percent, Chicago with 15 percent and Stewart with 14 percent.

• Statewide, there were $53 million paid losses — a $165 loss per policy.

• First American paid 41 percent of the total — $22 million, a $276 loss per policy. Fidelity (20 percent) and Chicago (13 percent) combined for 33 percent, or more than $17 million.

• Entitle was 12th in policies written with 0.39 percent of the market but paid $2 million in losses, or 4 percent of the total — a $1,605 loss per policy.

• 90 percent of policies were written by non-affiliated agents; 6 percent came from underwriter-affiliated agents and 5 percent from direct shops.