Buying a house with less than a fifth down means buying two insurance products in the same hour. Title insurance. Private mortgage insurance.
They arrive together, they are both paid by you, and they both protect the bank. So most people file them in the same mental drawer.
That is the mistake this chapter is about. One of them pays out about four cents on the dollar. The other has paid out more than it took in. They need completely different things from you, and neither of those things is done at the closing table.
Start here, because almost nobody is told it plainly.
The lender's title policy protects the bank. You pay for it. If a defect in the title wipes out the bank's security, the bank is made whole. You are not. The mortgage buyers who set the rules require this policy on every loan.1
The owner's title policy protects you. It is a separate purchase, it is usually optional, and it is the one you have to ask about.
Private mortgage insurance protects the bank. You pay for it. If you default and the house sells for less than the debt, the insurer pays the bank. Your debt does not go away.
So of the three, exactly one is bought for you, and it is the one nobody has to sell.
State regulators pool every insurer's statutory filings, so this figure is measured rather than estimated.
Across the whole industry, 5.2% of title premium went back out as claims in 2024. The four years before ran 4.7%, 3.1%, 2.3% and 2.9%.2
The per-policy version is easier to picture. Across 12.6 million policies issued in 2024, average premium earned was $1,306 and average claim cost was $61.3
The four largest underwriters report the same shape in their own accounts:
| Underwriter | 2025 | 2024 | 2023 |
|---|---|---|---|
| Fidelity National Financial | 4.5% | 4.5% | 4.5% |
| First American | 3.0% | 3.0% | 3.25% |
| Old Republic | 2.2% | 1.8% | 1.9% |
| Stewart | 3.4% | 3.9% | 4.1% |
Set that against ordinary insurance, from the same regulators' report and the same year. Homeowners paid out 66.0%. Personal auto liability paid 70.8%.2
The cleanest comparison sits inside one company's own accounts, because one of the four also writes ordinary insurance. Its filing describes loss ratios "in the mid- to low-60% range" for its specialty lines and "in the 2% range" for title. In 2025 its commercial auto book ran 72.3% and its workers' compensation 59.0%, against 2.2% for title. Same filing, same auditors, same accounting standard.5
One caveat that matters. A single year's title loss ratio can be thrown off by reserves being adjusted for policies written long ago. The underlying loss cost has sat in a 3–5% band for two decades. Read the band, not one year.6
And the industry's explanation is real, so take it seriously. Title insurers do the work before the policy is written — searching records, finding defects, fixing them. Claims are rare because problems were removed, not because claims are refused. That is a genuine service, and it is not what a low loss ratio usually means.
The awkward part is that the work and the price move independently, which is the next section.
Searching a title costs roughly the same whether the house is worth $200,000 or $900,000. The records are the same length. The premium is not.
Title premiums are set per thousand dollars of cover. So a house that costs three times as much carries roughly three times the premium for roughly the same search.
Two consequences follow, and both are documented by regulators rather than critics.
Most of the premium never reaches an insurer. In the regulators' 2024 aggregation, 73% of the industry's total operating expenses were amounts paid to or retained by title agents. Personnel costs were next, at 15.9%.7
The underwriters' own filings put the agent's share of agent-written premium at 77.5% and 80.2% in 2025.8 A federal audit found negotiated splits running 80% to 90%, and in some states agents charging the consumer a further separate amount for the same search and examination work.9
So the payout ratios above are measured against money that reached the underwriter, which is a fraction of what you paid.
Regulators who have run the arithmetic have ordered prices down. One state's insurance commissioner found that loss experience over five, ten, fifteen and twenty year periods indicated rate reductions of 14.9%, 11.1%, 9.7% and 6.2%.10 Another state's regulation states that certain industry expenses had been "included in the calculation of the rates, resulting in consumers paying higher, excessive rates."11
There is also a structural reason prices move slowly. Insurance rate-setting is largely exempt from federal antitrust law, and courts have applied that exemption to title rate filings specifically.12
This is the most immediately useful paragraph in the chapter.
If the property was insured before — and most previously-sold homes were — you may qualify for a reissue rate, a materially lower premium for insuring the same land again.13 If you are buying both the lender's and the owner's policy at once, a simultaneous issue rate applies to the second one, and it is small. On a $349,000 loan the industry's own figures put it at $100 in Arizona and Texas, $325 in Ohio, $400 in Florida, $550 in Colorado and $595 in New York.14
Neither discount is automatic. A federal audit found regulators concerned that consumers "may not be getting the discounts for which they are eligible," and industry officials agreeing that consumers might be unaware of them.15 A federal review put it more bluntly: borrowers unaware of simultaneous issue or reissue discounts "may be charged undiscounted rates."16
Ask two questions in writing before closing: does a reissue rate apply, and what is the simultaneous issue rate for the owner's policy. Both have a definite answer and neither is offered unprompted.
Federal law prohibits paying or accepting a fee for referring settlement business, and prohibits splitting a charge except as payment for services actually performed.17 A payment to a title agent is lawful only for real work — evaluating the search, clearing objections, issuing the policy.18
Enforcement actions describe what the rule is aimed at. One title firm paid commissions of up to 40% of title premiums to around twenty referrers.19 Another arrangement was found to coincide with firms referring "significantly more business" while the agreements were in place.20 A lender and a brokerage were penalized $1.75 million and $200,000 for referral payments.21
None of that describes every transaction. It describes what the price of a referral looks like when someone is caught charging it.
Title insurance is prohibited in one state. After title insurers there went insolvent in the 1940s and left policyholders with worthless cover, the legislature banned the product and built a state guaranty program instead.22
It charges a flat $175 for owner coverage up to $750,000, and provides that owner coverage free when the lender takes cover at the same time.23
Two honest qualifications, because the comparison is often made carelessly. The state program covers a narrower thing, and separate abstracting work is charged on top — a federal audit put that at roughly $550 in addition to the premium.24 And the program is not subject to insurance regulation in the ordinary way.25
Still, the loss experience is the striking part. Over eleven years the program paid less than $1,000 in claims.26 In its most recent audited year it recorded fee revenue of $8.0 million against a $93,000 provision for losses.27
Both large mortgage buyers now accept an attorney's opinion on title in place of a lender's policy on qualifying loans, with the attorney indemnifying against a failure to exercise reasonable care.28 One states directly that these "can provide an acceptable level of protection… at a much lower cost to the borrower."29
The limits are real and come from people who oppose the practice, which is worth saying. An opinion letter typically carries no duty to defend — if a claim comes, the recourse is to sue the attorney and hope the malpractice cover is sufficient.30 It has not traditionally covered forgery, fraud, duress, incapacity or impersonation.31 One state regulator has warned consumers that these are being offered as substitutes but legally are not.32
That gap matters more than it sounds. Fraud and forgery account for roughly 40% of total claim cost on refinance transactions.33 It is the unknowable risk that the policy is genuinely for.
Everything above describes a product where very little of the premium comes back. Private mortgage insurance is not that product, and treating them alike gets it wrong.
When house prices fell, PMI paid out far more than it took in. One insurer's loss ratio ran 200.1%, 152.6%, 137.5%, 259.5% and 220.4% across five years.34 A competitor recorded 131.2% to 250.4% over the same period.35 A third recorded 241%, 132% and 74% as the crisis subsided.36
Those are the numbers of real insurance covering a real catastrophe. Insurers in this line must also hold half of net earned premium in a contingency reserve for years, precisely because the losses arrive all at once.37
So the objection to PMI is not that it is poor value. It is that it protects the lender, you pay for it, and it does not stop when you would expect.
Two dates exist in federal law, and both are worth knowing exactly.
At 80%, you can ask. You may request cancellation on the date the principal balance is first scheduled to reach 80% of the original value of the property.38
At 78%, it must stop by itself. The requirement terminates automatically on the date the balance is first scheduled to reach 78% of original value, provided payments are current.39
Now read the words that do the damage. Both dates are set "based solely on the initial amortization schedule", and both are measured against original value.3839
Because the law's automatic trigger does not look at what the house is worth now. It looks at a schedule printed the day you signed.
If your home has appreciated, or you have paid extra, you have almost certainly crossed 80% of current value long before the schedule says so. Nothing in the automatic process notices. Reaching that point early is a request you have to make, usually with an appraisal you pay for, under your servicer's own conditions.
If the mortgage insurance was lender-paid, the premium sits inside your interest rate rather than as a separate line.40 The rule requires the lender to increase what it keeps "by at least the amount of the mortgage insurance renewal premium."40
It is the same policy from the same insurer. One insurer's filed rate card is titled "Borrower-Paid & Lender-Paid Monthly Premiums" and carries one set of rates for both. Same loan-to-value, same coverage, same credit score, same premium — only the payer changes.41
What changes is when it stops. Lender-paid cover must stay in force "until the mortgage is paid in full" and is non-refundable. Borrower-paid cover must terminate by law at 78%.42
So the rate increment that pays for lender-paid cover never comes off. Someone comparing a "no PMI" rate against a quote with PMI is not comparing two versions of one deal. If your down payment was under 20% and there is no PMI line on your statement, ask whether the insurance is lender-paid.
One related claim is worth not making. It is often said that a high-loan-to-value borrower pays twice — once in the rate and once in the premium. The pricing grids do credit the insurance, substantially and deliberately: above 80% the fee falls as the loan-to-value rises and the required cover deepens, which is not how a risk charge behaves.43 The credit is partial rather than total, so a narrow version of the claim survives and the strong version does not.
Find the PMI line on your mortgage statement. Then find your original amortization schedule and the month the balance is scheduled to hit 80%. That month is the earliest date you can ask. If there is no PMI line and your down payment was under 20%, ask whether the insurance is lender-paid.
A mortgage insurer can rescind cover after a claim if the loan file misstated something. One insurer estimated that rescissions reduced its incurred losses by about $2.9 billion over five years, and that at the peak roughly 28% of claims in a quarter were resolved by rescission.44
The dispute in those cases is between the insurer and the lender. But it is a reminder of who the policy is for. Nothing about it is a promise to you.
Six actions. Four cost nothing.
Title insurance is paid once and forgotten. PMI is a line in a monthly payment that people stop seeing after about the third statement.
Plenee can hold the one date that matters — the month your balance is scheduled to reach 80% of the original value — and raise it while it is still worth acting on. It can also show what the mortgage insurance has cost you in total to date, which is the number that makes the phone call happen.
You buy two insurance products at the closing table and both protect the bank. Title insurance pays out three to five cents of every dollar, by the industry's own accounts, against seventy on home insurance — partly because defects are fixed rather than claimed for, and partly because the premium follows the house price while the work does not. Ask for the reissue rate and the simultaneous issue rate; neither is offered unprompted. The owner's policy is the only one that pays you. PMI is different in kind, having paid out more than it collected when prices fell, but it stops on a schedule printed the day you signed and measured against the original value. If your house has gone up, nothing automatic will notice. Find the month your balance is scheduled to hit 80%, and ask.
Plenee Academy provides financial information and education, not personalized financial advice. Plenee Co. is not a registered investment adviser, broker-dealer, or financial planner. Legal Disclosures & Notices →