Image Credits: manusapon kasosod / Getty Images (image has been modified)

Startups Are Poised To Disrupt The $14B Title Insurance Industry

2 min read July 10, 2020
News

If you have bought a house in the last decade, you likely started the process online. Perhaps you browsed for your future dream home on a website like Zillow or Realtor, and you may have been surprised by how quickly things moved from seeing a property to making an offer.

When you reached the closing stage, however, things slowed to a crawl. Some of those roadblocks were anticipated, such as the process of getting a mortgage, but one likely wasn’t: the tedious and time-consuming process of obtaining title insurance — that is, insurance that protects your claim to home ownership should any claims arise against it after sale.

For a product that is all but required to purchase a home, title insurance isn’t something many people know about until they have to pay for it and then wait up to two months to get.

Now, finally, a handful of startups are taking on the title insurance industry, hoping to make the process of buying a policy easier, cheaper and more transparent. These startups, including Spruce, States Title, JetClosing, Qualia, Modus and Endpoint, enable part or all of the title insurance buying process. Whether these startups can finally topple the title insurance monopoly remains to be seen, but they are already causing cracks in the system.

To that end, we’ve outlined what’s broken about today’s title industry; recent developments in technology and government that are priming the industry for change; and a synthesis of some key trends we’ve observed in the space, as entrepreneurs begin to capitalize on a tipping point in a century-old, $14 billion business.

Title insurance 101

To understand how startups are beginning to challenge title insurance incumbents, we need to first understand what title insurance is and what title companies do.

Title insurance is unique from other types of insurance, which require ongoing payments and protect a buyer against future incidents. Instead, title insurance is a one-time payment that protects a buyer from what has already happened — namely errors in the public record, liens against the property, claims of inheritance and fraud. When you buy a home, title insurance companies research your property’s history, contained in public archives, to make sure no such claims are attached to it, then correct any issues before granting a title insurance policy.

Originally published at https://techcrunch.com.

Related Insights

Q3 BCV Update

Hello from BCV! While the markets remain bumpy, we’re coming off a busy few months and wanted to update you on the latest happenings. First, we’re thrilled for the Billtrust team regarding their recently announced $1.7 billion acquisition by EQT Private Equity, which is expected to close early next year. BCV partner Matt Harris first invested in…

4 min read
News

Back and Better Than Ever: Highlights From Our 7th Annual Fintech Demo Day

NYC in fall was the perfect backdrop for our annual Fintech Demo Day, which we hosted at Jazz @ Lincoln Center with our friends at Nyca Partners and QED Investors in mid-October. After several years of virtual events, we decided to lean in this year and leverage this incredible venue with our largest-ever audience and…

Noah Breslow 4 min read
News Fintech

BNPL For B2B Marketplaces: Accelerating Trillions In B2B Spending

Buy-now-pay-later, or BNPL, has taken consumer e-commerce by storm, enabling shoppers to get the items they want today, but put off the pain of paying for them until tomorrow — at zero or very low interest costs. Since BNPL began popping up as an option at checkout via point-of-sale players such as Affirm, Klarna, and…

Noah Breslow 6 min read
News Commerce