Exhibit 23.1




                 Exhibit 23 - Consent of Independent Auditors



We consent to the use of our report  dated  January  22,  1998,  in this  Annual
Report (Form 10-K) of Triad Guaranty Inc.

Our audit also included the  financial  statement  schedules of Triad  Guaranty,
Inc.  listed  in Item  14(a).  These  schedules  are the  responsibility  of the
Company's  management.  Our responsibility is to express an opinion based on our
audits. In our opinion,  the financial  statement  schedules  referred to above,
when considered in relation to the basic financial  statements taken as a whole,
present fairly in all material respects the information set forth therein.

We also consent to the incorporation by reference in the Registration  Statement
(Form S-8 No. 33-75668) pertaining to the 1993 Long-Term Stock Incentive Plan of
Triad  Guaranty  Inc. and the  Registration  Statement  (Form S-8 No.  33-96550)
pertaining to the Triad  Guaranty Inc.  401(k) Profit Sharing Plan of our report
dated January 22, 1998, with respect to the  consolidated  financial  statements
included  in this Annual  Report  (Form 10-K) of Triad  Guaranty  Inc.,  and our
report  included  in the  preceding  paragraph  with  respect  to the  financial
statement schedules.



/s/ERNST & YOUNG LLP
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Raleigh, North Carolina
March 23, 1998