TIAC Celebrates 25 Years of Service to ALTA Members and the Title Industry
October 8, 2013
Times were tough for title professionals in the 1980s. Like today, abstracters and title agents across the country were troubled by recurring errors and omissions (E&O) insurance problems brought about by abrupt market changes. Dramatic swings in prices and availability led ALTA to look for a better alternative that would bring long-term stability for title professionals seeking quality E&O coverage.
After considering several different approaches, ALTA leaders in 1987 decided the most effective solution would be to create the Title Industry Assurance Company (TIAC), an independent risk-retention group wholly owned by ALTA members. After months of planning, TIAC began raising capital during the 1987 ALTA Annual Convention in Seattle. Coincidentally, this happened on Black Monday, Oct. 19, when the stock market crashed, sending the Dow down almost 23 percent.
With the support of ALTA membership and the approval of insurance regulators in TIAC’s Vermont domicile, TIAC issued its first policy on June 1, 1988. Now, 25 years later, TIAC is one of the longest-running and successful E&O insurance providers available.
“While many other E&O providers have come and gone from the market, TIAC has long been the gold standard and has continuously exceeded its original goal of providing a long-term stable market for ALTA member title professionals,” said TIAC Underwriting Manager Rich Curd. “All of our competitors are multi-line insurance providers, while TIAC is strictly a monoline company.”
Curd pointed out that over the past few years, several major carriers have left the market, reduced coverage and/or increased minimum deductibles.
“The market is very fluid,” Curd said. “Some years there are a lot of competitors, other years not so much. We are in a cycle where there aren’t as many.”
Any active or associate member of ALTA may apply for E&O coverage from TIAC, which insures about 1,400 ALTA members. Non-members must join ALTA before obtaining coverage from TIAC. All insureds must also purchase a minimum of one share of stock in TIAC, currently $100 per share ($1 par value). This is a one-time purchase and is required to satisfy the requirements of the federal law under which TIAC is chartered.
Coverage is available to companies of all sizes, from solo abstracters to large title agencies. Limits of liability start at $250,000 for each claim/$250,000 policy aggregate up to $1 million each claim/$2 million policy aggregate. Limits up to $5 million/$5 million are available to qualifying firms. Deductibles start as low as $2,500 for each claim and typically are capped at a deductible annual aggregate amount equal to three times each claim deductible amount, thereby limiting an insured’s out-of-pocket deductible retention in any policy period.
TIAC provides broad state-of-the-art coverage for professional services—including title opinions or title certifications—performed for others for a fee such as:
- First dollar (no deductible) defense coverage
- Claims expenses in addition to the limits of liability
Dan Mennenoh, president of H.B. Wilkinson Title Co., is the current president of TIAC’s board and a member of ALTA’s Board of Governors. His company has been insured by TIAC since 2004.
“TIAC’s premiums are competitive and if an ALTA member has not explored coverage with TIAC recently, they should to take advantage of TIAC’s broad coverage, expert underwriting and claims services, risk management services and the long-term stability of the title industry’s own E&O insurer,” he said. “Over the past few years, we have once again watched other carriers exit the market place because of the economic downturn and the higher claims that have resulted. TIAC has weathered this most recent storm and is well positioned to continue to provide ALTA members with needed E&O coverage.”
Frank Pellegrini said his company, Prairie Title, has been insured by TIAC for nearly 20 years. He agreed with Mennenoh that TIAC’s long-term stability is important for agents as they seek to minimize risk, but also appreciates the insurance company’s knowledge and support of the title insurance industry.
“For us, it is important to be with an E&O carrier that is deeply involved with the industry, participates in the national association, and stays current in legislative and regulatory trends,” Pellegrini said.
What Is TIAC?
In 1988, ALTA created the Title Industry Assurance Company, an independent risk retention group wholly owned by members of the Association, to provide a better alternative and bring long-term stability for title professionals seeking E&O coverage.
How Does TIAC Determine Its Premiums?
Premiums are based on a number of factors including:
- Number of professionals insured
- Annual gross income from covered title activities
- Policy limits and deductible selected
- Coverage selected
- Prior E&O loss experience
- Prior E&O insurance history
TIAC has retained the law firm Troutman Sanders LP as claims counsel.
ALTA members may contact TIAC at 800-628-5136 or online at www.cpim.com/tiac for information.