Title Companies – Is Your Ten Million Dollar Trust Account Insured if your Bank Goes Under?

I just moved my retirement funds into an insured account.  I started thinking about it because part of the financial package announced by the FDIC to bolster confidence in the banking industry increased FDIC coverage on some qualifying accounts from $100,000 to $250,000. In checking, the account I had was not insured. When I requested the change to an FDIC insured Account,  the banker asked what prompted the change, saying the bank was certainly sound, and he was sure I did not need to worry. But I did, worry that is, and I did move the funds. I got a lower rate, .63 percent instead of .65 percent. Big deal. But, somehow, with all the Banking problems, it just seemed to be the right thing to do. It may help me sleep a little better at night

That started me thinking. How does that work for Trust Accounts? The increased insurance is certainly not sufficient funds to cover trust accounts for title insurance companies, title agents and real estate companies routinely handle tens of millions of dollars each month. At one point, I worked for a Title Company that handled over a Billion dollars a year in closing funds. That $250,000 of DIC coverage doesn’t look like anything when faced with numbers like that. Does anyone know if there are any special coverages in place for a title company if  their bank goes under?  Scary thought, especially in this economy. Try not to lose any sleep over it…but then again…