One of the big differences in title insurance among states is the historical reliance on Abstracts and how those are used in current times. Here, we’ll talk about the historical reliance on Abstracts in title insurance, and how that differs among states.
Abstracts as Evidence of Title
An Abstract is a summary of the recorded history for a parcel of land. An Abstract usually starts with a Patent (a document by which the US grants public lands to an individual) and briefly notes each document of record that affects title to the parcel. This would include deeds, mortgages, easements, and so on. Consumers are sometimes confused in believing that an Abstract is some type of insurance. It is not. It is only the history of title to a property.
Historically, most states had Abstracts that were the evidence of title. When a title order was placed, the seller (or the borrower if it was for a loan policy) would provide an Abstract of title, and the title company would review the Abstract, obtain a stub or an update to the Abstract, update the Abstract, and then produce the title commitment from there.
These days, Abstracts do seem to still be in use on a regular basis in Iowa and the parts of the Dakotas. In other states (Minnesota, for example), it is more common for title insurance companies to just conduct a title search directly from the public records and we rarely, if ever, see an Abstract of title anymore.
In Iowa and Western North Dakota we do occasionally see Abstracts, but most often we perform an abbreviated title search at the county. The expense is much lower than creating a full Abstract of the property.