As generative artificial intelligence (AI) continues to innovate, advance and expand, businesses and organizations are adapting to keep up. How can the title insurance industry best incorporate AI into its practices, while safeguarding its business, customers and employees? Our latest blog navigates this issue.
WHAT IS GENERATIVE AI?
Generative AI is a form of artificial intelligence that can create content (such as text, images, video, audio or software code) in response to a user’s prompt or request. Relying on algorithms that simulate the human brain’s learning and decision-making processes, generative AI can then identify and encode patterns into massive databases for future, automated use. By using this automation, businesses can access real-time data and predictive insights, which can help inform decision making and enhance customer engagement.
BENEFITS OF AI IN THE TITLE INDUSTRY
According to Charlotte Brown, VP of Product and Design at digital closing software company Qualia, as of April 2025, 90% of title and escrow professionals are already using AI in some capacity and 51% are optimistic about its long-term impact on the industry. Innovations to business models are shifting away from traditional, competitive models toward what’s being called “collaborative ecosystems,” in which the optimization of data, technology and skills between companies leads to greater strength, nimbleness and customer satisfaction. AI’s automation could help lead these new ecosystems to success. According to Brown, within the title insurance industry, the five key benefits of using AI include:
1. Enhanced Document Processing:
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- AI algorithms are trained to identify patterns and correlations, which may help uncover potential issues accurately and efficiently in legal documents.
- Identify discrepancies and reduce delays and risks of human error.
- Improve operational efficiency while lowering the risk of costly claims.
2. Data Analysis and Insight Sharing:
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- AI can facilitate efficient information exchange among title agents, underwriters, lenders and real estate professionals to support seamless service delivery.
- Enable real-time sharing of reports and insights, strengthening industry partnerships and improving transparency.
- Improved communication can lead to client satisfaction and reinforce your reputation for excellence in the industry.
3. Workflow Optimization:
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- AI automation can streamline everyday tasks such as data entry, document management and compliance checks.
- It can reduce manual effort, improve accuracy, increase efficiency and provide professionals with more time to focus on strategic and client-facing responsibilities.
4. Fraud Detection and Risk Mitigation:
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- AI tools can cross-reference multiple databases, such as property history and ownership records, to flag anomalies that may indicate fraud.
- Predictive modeling improves underwriting accuracy and reduces exposure to risk.
- These tools can also help detect increasingly complex and multilayered fraud tactics such as:
- Phishing & Business Email Compromise (BEC)
- Vacant land scams
- LLC/Ownership fraud
- Ransomware
5. Improved Client Experience:
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- AI-powered chatbots and email responders can provide 24/7 support.
- Clients can benefit from real-time updates and speedier resolutions.
- This level of efficiency can enhance trust and foster transparency throughout the transaction process.
RISKS AND BEST PRACTICES
Along with innovation, AI’s increased accessibility to the public also makes it a dangerous tool for criminals looking to use the technology maliciously. It’s important to understand the general risks associated with AI. For example, using AI headshot generators may seem like a great idea for people in the title and escrow industry, but it also exposes our business and our customers to certain risks, including:
- Privacy Concerns: Uploading personal photos to AI tools raises privacy issues. How is that data stored, used and potentially shared with third parties?
- Misinformation and Fraud: AI-generated headshots can be exploited to create fake identities, leading to scams, impersonations or deepfakes.
- Copyright and Ownership: Users may not be allowed the rights to the content created by some platforms, resulting in legal ambiguity or misuse.
- Societal Bias and Misrepresentation: AI models may carry preexisting biases in their training data, leading to unfair, discriminatory or unrealistic outputs, particularly for underrepresented demographics.
Despite Qualia’s findings that 90% of title and escrow professionals are already using AI, only 6% of companies have adopted a formal AI usage policy for their employees. A lack of policy introduces ethical, compliance and best practice concerns for employers. Qualia recommends that businesses not only establish a company-wide policy, but also offer employees AI literacy training, critical thinking exercises and hands-on practice with AI tools.
Best practices for prompting an AI chatbot include:
- Be clear, concise and use correct grammar.
- Write out prompts in sentence form rather than as questions.
- Include as much information as possible, listing the most important information first.
- Include only information you want in the result and avoid any extraneous, private, sensitive or proprietary information. The chatbot will use whatever content it finds in prompts to generate its results.
- Continue refining your prompt until you get the desired result.
- Break down complicated prompts into individual steps.
- Double-check the chatbot’s results for accuracy.
REGULATORY UNCERTAINTY
Although no comprehensive federal AI regulation currently exists, the legislative landscape is evolving rapidly. The U.S. House of Representatives recently passed the One Big Beautiful Bill Act (H.R. 1). While primarily a budget reconciliation bill, it includes a significant provision that imposes a 10-year moratorium on state-level AI regulation. If enacted, it would prevent states from enforcing any AI-related laws and block new regulations. Despite efforts to limit state AI regulation, many states, such as California, Colorado, Illinois, Utah, Tennessee, Arkansas and Montana, are actively implementing AI regulations.
Certain lawmakers and industry advocates argue that state-level AI regulation is necessary to tackle issues like bias, misinformation and consumer privacy, while others believe a unified federal approach could streamline AI governance and reduce compliance burdens for businesses and organizations. Additionally, there is ongoing debate about whether AI oversight should be guided by broad regulatory frameworks or structured around sector-specific guidelines.
As AI legislation continues to take shape, businesses and organizations should prepare for future compliance standards by:
- Establishing internal AI policies
- Conducting risk assessments and investing in compliance frameworks
- Monitoring evolving legislation
- Prioritizing transparency and ethical use of AI tools
A GLANCE FORWARD
While AI presents tremendous opportunities for title insurance companies to improve accuracy, efficiency and the customer experience, it also carries real risks like privacy issues, susceptibility to fraud and legal ambiguity. By staying informed, adopting best practices and preparing for regulation, title insurance companies can cautiously and responsibly lead the industry into its next era of innovation.