Understanding Risk from the Underwriter’s Perspective

In Part 1, we looked at the impact of title claims from the perspective of agents and the ripple effects they can have on client trust, reputations, and business operations. In this section, we’re focusing on how claim patterns can influence underwriter behavior—and by extension, the dynamics and trust between underwriters and agents.

While title insurance aims to safeguard transactions from past issues, the volume of claims underwriters still face highlights just how complex and detail-sensitive this work remains. Even a small number of avoidable claims can result in serious professional consequences.

Below are some of the ways title claims can influence underwriter decisions and impact working relationships across the industry.

Increased Scrutiny: Repeated or serious claims from one agency often lead to more rigorous reviews of title work, increased requirements, or a reluctance to underwrite more complex or potentially risky transactions.

Potential for Higher Premiums: If an agent or agency demonstrates a pattern of generating claims, underwriters may adjust pricing to reflect the increased exposure—increasing the premiums charged for their policies to offset the higher risk and payout potential.

Loss of Underwriting Authority: In more severe cases, where an agent or agency consistently produces problematic title work leading to significant claims, an underwriter might reduce or even revoke their underwriting authority. This would severely limit the agent's ability to issue title insurance policies.

Strained Relationships: Frequent or large title claims can strain the relationship between the title agent and the underwriter. This can lead to less collaboration, less flexibility in underwriting decisions, and a general lack of trust. Cooperation can erode quickly.

Portfolio Risk: Beyond individual transactions, a pattern of claims can put pressure on an underwriter’s broader portfolio. This financial strain may lead to reduced coverage offerings, more selective underwriting practices, or in extreme cases, a complete market exit. These shifts ultimately affect the broader title community, not just those directly involved in the claims.

Increased Exceptions: Following a title claim, underwriters may become more cautious in issuing future policies, especially for the same property or geographic area. This can result in more specific exceptions listed in the policy, reduced willingness to offer certain endorsements, tighter overall terms of coverage, and reduced scope for potential future issues related to the claim.

Limitations on Endorsements: Underwriters might become less willing to issue certain endorsements (additional coverage for specific risks) in areas or with agents that have a history of claims related to those endorsements.

Policy Refusal (in extreme cases): If a property has a history of significant title issues or if an agent has a poor track record, an underwriter might outright refuse to issue a title insurance policy for a particular transaction due to the perceived high risk.

Changes in Underwriting Guidelines: A significant number of similar title claims across the industry can prompt underwriters to revise their underwriting guidelines, potentially making it more difficult or expensive to obtain coverage for certain types of properties or situations in the future.

Reduced Coverage Amounts: In some instances, particularly if a claim involved a significant payout, an underwriter might be hesitant to issue policies with high coverage amounts for related properties or with the same parties involved.

When these shifts happen, they don’t just affect your current deals, they can impact your ability to compete and grow in the future.

Mitigating the Risk Means Getting the Work Right

Avoiding these outcomes starts with accuracy and experience at every step.

We’ve spent over four decades helping our clients reduce claim risk by doing the work right the first time. Our people aren’t just data entry clerks—they are highly trained professionals who understand the nuances of legal descriptions, document classification, and local recording rules. They’re trained to recognize anomalies, flag inconsistencies, and deliver clean, accurate work that holds up under scrutiny.

We also understand that quality comes from consistency—something that’s difficult to maintain in high-turnover or poorly trained teams. Our retention and training model is built to ensure that your work is handled by experienced, dedicated career professionals who are committed to your success.

While the industry recognizes that claims can’t be eliminated entirely, our mission is to minimize their likelihood—and the potential impact on agents, customers, and underwriters alike. With a deep commitment to due diligence, open communication, and accuracy at every level, HDEP has the experience and discipline to help you deliver with confidence.