The History of Title Insurance

History of Title Insurance

The history of title insurance is actually the history of a very recent phenomenon.

As you prepare to purchase title insurance or do a title check on a residential or commercial property, you might be wondering—who came up with this in the first place? Here is a brief history of title insurance and how it has changed property buying forever.

Why Was Title Insurance Needed?

Historically, title insurance was needed for the same reasons we need it today. Buying a property does not always guarantee that the person selling it is the rightful property owner, so what can you do? Title insurance became a way to make sure that the seller had ownership rights and make both parties aware of any interests, liens, or encumbrances that exist. The people once charged with doing this were called conveyancers.

When Did Title Insurance Start?

The history of the modern title insurance industry started in response to the case of Watson v. Muirhead in the mid-1800s. Muirhead was a conveyancer who performed a title search on Watson’s behalf. Muirhead did not fully disclose potential issues with the property to Watson in good faith and Watson completed the purchase. After the purchase was done, he had to fulfill multiple liens that Muirhead had ignored. Watson attempted to sue to get back his losses, but because title insurance didn’t exist, he had no case.

After this case, Pennsylvania legislature provided the inspiration for title insurance that provided responsibility without proof of negligence, financial security by reducing the risk of insolvency, and the assumption of risks that were not publicly disclosed. After its invention, title insurance gained in popularity and it’s now a part of just about every real estate transaction in the nation.

A Title Company You Can Trust: Colony Title

At Colony Title, we will help you through the process of getting your property’s title and help you avoid the pitfalls of hidden costs while you buy your home. We are also well trained in identifying any and all errors in public records and helping you resolve them. We specialize in real estate title insurance in both Maryland and Washington, D.C., and we will perform an expert title search, check through all past documentation, and examine records for any fraud or forgery. For more information on how we can get you into the home of your dreams, contact us online or give us a call at (410) 884-1160. To get more updates on housing markets and how to get into your home, follow us on Facebook, Twitter, LinkedIn, and Google+.

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