Let’s Kill ‘Title Insurance’
I make a decision about everything that I pay for. At some point, I either want it or I realize I need it and decide to buy it.
Windex, my jeans, a lawyer, an oil change, a new car, shoe repair, health insurance.
Whether it’s sexy or it’s just needed, I decide to buy it, find and choose the person I want to buy it from and do it. If it makes me happy or solves my problem, I value it. If it sucks I don’t, and next time I might make a different choice.
Are you with me so far?
In 2005, as a pivot, I started a ‘title company’. There’s a very high likelihood that you don’t know what that is or what my company does. Even if you’re in real estate, even if you buy, broker or lend on real estate professionally; you may know what type of things are ‘title things’, but odds are you don’t understand what we do all day.
Don’t worry, I’m not going to tell you about it. Not now, anyway.
This is actually a conversation about value, business and human nature. As I see it, through the lens of this weird service that my business provides.
Nobody has ever woken up, stretched the morning wiggle and said, “I think I’ll treat myself to some title insurance today.” The person that pays for our service never actually makes a decision to buy it, nor do they understand what it is or why they need it.
There could be another business out there that has this same challenge, but I can’t think of one.
As a business and as a human, how do you create value if you provide a service no one understands and never chooses?
Now, it’s true that while our customers are real estate buyers and borrowers, our clients are those that do actually choose us: lenders, banks, Realtors, real estate investors, attorneys. Here comes part two of the value-perception challenge:
It’s called ‘title insurance’, so the perception is that the product, the thing that we produce, the thing that customers pay for is an insurance policy. And at the end of the day, these insurance policies are all basically the same. In addition to that, the costs of our service are largely regulated by each state so there’s very little price variation between competitors.
So we sell a price fixed commodity that our customers don’t understand and don’t choose to buy. I wonder what Kevin O’Leary and Marc Cuban would say about that?
The perception of what a title company does and the reality of what one does are very different. That’s bad PR by an entire industry. Systemic, long-term, old-skool, dusty, over-confident, shitty marketing. Or lack of.
I don’t think ‘title insurance’ has much to do with insurance and it barely has to do with title.
I promised you I wouldn’t bore you with detail about the title business and I’m sticking to my promise. I’m also not going to tell you ‘how it is’ or complain or build a case for why I’m so important. All so boring.
But I think this part is interesting no matter what business you’re in or even what you do:
‘Title insurance’ (BTW, I cringe when I write those words), is the only type of ‘insurance’ that I know of that doesn’t insure what might happen in the future. Chris Rock said insurance should be called ‘in case shit happens’.
Life insurance, health insurance, disability insurance, auto insurance, homeowner’s insurance: buying these insurances (and you probably have all or most of them) can’t control whether or not the event will happen. They just guarantee you that if it does, they’ll be there with money.
‘Title’ in the real estate transaction actually eliminates or reduces the chances of the event happening in the future. We make sure that events that happened in the past aren’t creating a problem in the present and we fix it now, so it won’t be a problem later.
Your new roof came with a ten-year warranty. But you don’t buy just roof insurance. You pay a roofer to make sure it won’t rain on your head and as a bonus, he gives you a warranty to make you feel all warm and fuzzy. The real value is in the work not the guarantee.
We’ve rebranded our company and I’m up for a rebrand of our core service. For the entire industry. Let’s rebrand ‘Title Insurance’ and call it ‘Transaction Guidance’. Or ‘Research & Communication Guide’. Or ‘Legal, Communication, Coordination, Fiduciary Hustle Advisor’.
We obviously need work on the name. I’m open to suggestions.