Key takeaways

• Follow 5 essential steps to launch your title company. From state licensing requirements and title insurance exams to securing E&O insurance and choosing the right underwriter
• State requirements vary significantly—Texas, Florida, California, Arizona, and Colorado offer the most favorable markets with clear regulatory frameworks and strong real estate activity
• Protect your business from day one with wire fraud prevention tools like CertifID, which provides identity verification, secure wire transfers, and up to $5million in insurance coverage per file

The real estate industry has always been a fast-paced business, but with the introduction of new digital technologies and tools, every facet of the home-buying process is looking dramatically different.

These changes have made it easier for consumers to learn about properties, connect with real estate professionals, and even handle the once-dreaded closing process.

With these digital stars aligning, for those interested in getting into this rewarding part of the real estate industry and learning more about how to start a title company, this article has an overview of all the key points you need to know to jump-start the process.

5 steps to start a title company

While every state and even each city may have different requirements and rules for entering the title industry, generally those entering the business have to follow a few steps: 

Step 1: Research the title company requirements for your area

To protect both title agents and their customers, each state has its own set of insurance requirements.

These requirements may include:

• Obtaining title agent licensure and/or completing relevant training courses
• Holding the necessary insurance and bond coverage
• Meeting financial stability standards
• Proving legal oversight of title-related documentation and workflows
• Holding proof of legal business registration with the relevant jurisdiction(s)
• Completing a background check

To develop your own to-do list, the National Association of Insurance Commissioners compiled a complete listing of state insurance department websites.

Step 2: Prepare for the title insurance exam.

Depending on their state, each title agent may be required to take a pre-licensing course and exam. 

To help get started, many states can provide a list of preapproved courses and training providers to ensure you complete the necessary classes to sit for the licensing exam.

While the length and topics can vary, the licensing exams themselves will cover topics such as:

• Insurance regulations
• General insurance concepts
• Title insurance principles
• Title exceptions 
• Procedures for clearing a title
• Other facets of real estate transactions

Step 3: Research surety bonds and E&O insurance

With your title insurance exam preparation underway, title companies are usually required to carry a fidelity bond and/or a surety bond of generally no less than $50,000. Surety bonds ensure that a title company can fulfill its financial obligations to its customers in the event that something should happen to your company during the closing process. Surety bonds range in coverage from 10-20 percent of the title agency’s net worth and can range from $200-$1,000 in cost per coverage period.

Most states also require errors and omission (E&O) insurance, which provides similar coverage as professional liability insurance, in an amount not less than $250,000. 

In the event of a mistake or accidental mishandling of the title clearing process, E&O insurance will cover the title agent against a claim of professional negligence.

Step 4: Choose the right title insurance underwriter

A critical part of the title transfer process is completed by a title insurance underwriter. This person is responsible for researching the chain of a title for any issues that could present the new owner with any legal challenges to the property, such as liens, judgments, legal description problems, or marital or inheritance rights. 

Because of the potential legal and civil issues that could arise in the event of a title issue, title agents should work to find their own experienced in-house or partner title insurance underwriter.

Step 5: Get licensed

Once you have completed all your state’s licensing requirements, it is time to apply for a license and officially open your business. Congratulations! 

Research the requirements in your state

The requirements for how to start a title company will vary by state, so you must first find out more about how to license a title company where you live. 

Review the website for your state’s Department of Insurance to get started. Here’s a list of the land title associations by state:

• Alaska Land Title Association
• Land Title Association of Arizona
• Arkansas Land Title Association
• California Land Title Association
• Land Title Association of Colorado
• District of Columbia Land Title Association
• Florida Land Title Association
• Idaho Land Title Association
• Illinois Land Title Association
• Indiana Land Title Association
• Iowa Land Title Association
• Kansas Land Title Association
• Kentucky Land Title Association
• Louisiana Land Title Association
• Maryland Land Title Association
• Michigan Land Title Association
• Minnesota Land Title Association
• Missouri Land Title Association
• Montana Land Title Association
• Nebraska Land Title Association
• Nevada Land Title Association
• New England Land Title Association
• New Jersey Land Title Association
• New Mexico Land Title Association
• New York Land Title Association
• North Carolina Land Title Association
• North Dakota Land Title Association
• Ohio Land Title Association
• Oklahoma Land Title Association
• Oregon Land Title Association
• Pennsylvania Land Title Association
• (South Carolina) Palmetto Land Title Association
• South Dakota Land Title Association
• Southeast Land Title Association
• Tennessee Land Title Association
• Texas Land Title Association
• Utah Land Title Association
• Virginia Land Title Association
• Washington Land Title Association
• Wisconsin Land Title Association
• Wyoming Land Title Association

In many cases, your state will require that you take coursework before taking the licensing exam, so you need to know what those exact requirements are.

How to start a title company in a specific state

Starting a title company requires understanding your state's specific requirements. Here's what you need to know about opening a title company in the following states.

How to start a title company in Texas

Texas offers a well-established regulatory framework and a thriving real estate market, making it an excellent state to launch your title company. Here's how to get started:

Texas requires title agents to be licensed through the Texas Department of Insurance. You'll need to complete pre-licensing education (minimum 30 hours), pass the state exam, and secure E&O insurance of at least $1 million. 

Your company will need to maintain a surety bond based on your escrow account activity. The Texas Title Insurance Act provides clear frameworks for operations, and you'll need to establish relationships with approved underwriters.

How to start a title company in Florida

Florida's real estate environment and clear regulatory structure make it a great state for new title companies. The process includes:

Florida requires title agents to hold an active Florida insurance license with a Title Insurance (2-40) license. You'll need to complete 40 hours of pre-licensing education, pass the state exam, and undergo a background check. 

Your company must maintain E&O insurance of at least $250,000 and a surety bond based on the volume of funds you'll be handling. Florida follows a promulgated rate system, meaning title insurance rates are set by the state.

How to start a title company in California

California's diverse real estate landscape and sophisticated title industry make it an exciting state to establish your title company. Here's what you need to know:

California title companies can operate as either escrow companies or controlled escrow companies. You'll need to secure a license from the California Department of Financial Protection and Innovation. 

This requires a minimum net worth of $25,000-$50,000 depending on your business structure, a surety bond ranging from $25,000-$150,000, and comprehensive financial documentation. 

California doesn't require individual licensing for title agents, but your company must maintain strict compliance with escrow law.

How to start a title company in Arizona

Arizona offers straightforward licensing requirements and a supportive regulatory environment for title entrepreneurs:

Arizona requires title companies to be licensed through the Arizona Department of Insurance and Financial Institutions. Individual title agents need to complete pre-licensing education, pass the state exam, and maintain E&O insurance of at least $250,000. 

Your company will need to establish relationships with approved underwriters and maintain appropriate bonding based on your escrow activity. Arizona follows a file-based pricing model for title insurance.

How to start a title company in Colorado

Colorado provides clear regulatory guidelines and stable real estate conditions that support new title companies:

Colorado requires title insurance producers to be licensed through the Colorado Division of Insurance. You'll need to complete pre-licensing education (16 hours for title insurance), pass the state exam, and secure E&O insurance. 

Your company must maintain a surety bond proportional to the average quarterly balance of escrow funds handled. Colorado uses promulgated title insurance rates, providing predictable pricing structures for your business.

Get the right wire fraud prevention tools for the job

With the rise in wire and real estate fraud, real estate professionals are under increased pressure to protect their businesses and their customers' interests.

One of the most powerful ways to mitigate the risk of wire fraud is to choose a platform through which your business can verify identities, secure payments, validate payoff instructions, and confirm wire instructions at each stage of the closing. CertifID provides fraud protection for your title company, including:

• Identity verification: Verify identities of buyers, sellers, and business entities through device-based validation with real-time checks
• Secure earnest money deposits: Protect earnest money transfers with verified payment processing
• Payoff ordering and protection: Instantly verify 96% of payoff accounts, eliminating lender callbacks and protecting against payoff fraud
• Wire instruction verification: Securely collect and confirm all wire instructions before funds are sent, eliminating the risk of email-based fraud
• Direct insurance coverage: Up to $5 million in direct insurance per file, covering all payments and wires verified using CertifID
• Fraud recovery services: Access to dedicated fraud recovery services with connections to the Secret Service, which has recovered over $90 million in stolen funds
• Integration with leading TPSes: Works directly with your title production software to streamline your workflow and eliminate manual processes

See CertifID in action — get a demo today!