Entitled to Profit: In Texas, Title Insurance Is a “Total Scam” (2021) | Hacker News Reader

Entitled to Profit: In Texas, Title Insurance Is a “Total Scam” (2021)

texasobserver.org

19 pointsthunderbong11 comments

> In 2017, the latest year for which data is available, title companies sold $1.8 billion worth of policies, according to the Texas Department of Insurance (TDI). Of that, title companies retained $1.5 billion and paid $335 million over to their underwriters, the companies that actually compensate policyholders in the event of a claim. But according to TDI data, only about $24 million was needed to settle claims from title defects that year. In other words, for every dollar that the industry took in as revenue, they paid out little more than a penny to policyholders.

This amount of graft and rent seeking boggles the mind.

Love your comment.

You should read the annual disclaimers on how much your company’s health insurer pays out for health insurance claims filed by your company.

I only noticed seeing this dollar figure in the paperwork for some annual disclaimer this last year. It’s similarly shocking… just 1-2 pennies on the dollar for the Fortune 100 company I work for by my envelope estimate. And here someone had me thinking the hospital admins were the main problem.

You are not possibly correct, sorry. It's typically 80%.

Health insurers have their profits capped by the ACA. They can’t make more than 120% of what they spend. Obviously this creates an incentive to spend more, and that’s a whole other discussion, but the point stands that they aren’t paying back 1% of what they make.

You raise a good point; I wasn't familiar with that 80/20 ACA rule. I'm not sure I could put my fingers on the one-page annual notice I received but it said something like the healthcare benefits paid out for the prior year were 1.6 million which seemed awfully low compared to the number of employees and the costs of premium per employee. I won't repeat my claim without better evidence next time; feel free to discount it.

Only little guys pay insurance.

You get to a certain size, and you self-insure. Blue Cross / Aetna and the likes are involved to do the paperwork.

Every time you file a claim, it is eventually paid by your employer (plus processing fee)

Maybe you buy a stop loss policy for the entire plan to limit your risk.

I want to know more about the lobbying! How does this do-nothing industry get this massive state to hand them a billion dollar per year stream of free money? Surely that requires more than some free steak dinners and rounds of golf. Do they know everyone's secrets? Is it a front for the mob? There's got to be a juicy story here.

Rent seeking behaviour? In TEXAS!? Surely, you jest!

Are we supposed to be able to easily infer what you're referencing?

I guess I'm out of the loop.

Read the article.

CA is the same.

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