With so many home owners currently capitalizing on the low rates and refinancing their mortgages, it is imperative for consumers to understand your state’s title insurance guidelines. What fees can be charged? How they are calculated? Which states have mandated set amounts for title insurance? etc.
Several states fit into bucket categories. Basically title insurance for $100,000 to $200,000 in coverage the charge is X. These bucket rates states will be covered in a post in the coming days.
In many other states there are Title Insurance Rating Bureau’s. Essentially these committees are appointed by the States Department of Insurance in order to look at statistical data and formulate a Rate Manual. This rate manual is then adopted by the majority of Title Insurers licensed in the state which in turn require their agents to use when computing title insurance rates.
For instance a PA Title Company must follow TIRBOP (Title Insurance Rating Bureau Of Pennsylvania). Pennsylvania Title Insurance rates are all inclusive. Meaning that the PA Title Company should not be charging anything other then the actual PA Title Insurance, related endorsements and a CPL (Closing Protection Letter). Moreover, Pennsylvania has drastic state mandated discounts that are applicable when refinancing within a certain amount of time. If the last transaction was within 10 years ago this “reissue rate” is 10% lower then the basic rate; 2-4 years ago and the rate is 30% off of the “reissue rate”; and if with in 2 years ago the rate is 40% off the “refinance rate”. Here is a link for more information on PA Title Insurance and the related rates and fees.
The New Jersey Department of Banking and Insurance (“DOBI”) in 2009 approved an application from the New Jersey Land Title Insurance Rating Bureau (“Rating Bureau”) that every NJ Title Company must follow; to (1) replace the long-standing Basic Rate and Reissue Rate schedules with a single Standard Rate in the New Jersey Manual of Rates and Charges (“Rate Manual”), and (2) replace the two-tier county Examination Charge (usually referred to as the “search and exam” charge, for either $105.00 in Basic Rate matters or $90.00 in Reissue/Refinance Rate matters) with a uniform search and exam charge of $100.00, regardless of the Rate schedule applied. Here is a link for more information on NJ Title Insurance and the related rates both reissue, refinance and basic.
In Ohio, the “OTIRB” (Ohio Title Insurance Rating Bureau) sets the rates for Ohio Title Insurance through their recently changed and adopted Rate Manual.
In Delaware the “DTIRB” (Delaware Title Insurance Rating Bureau) has set forth a Manual which sets forth definitions, general rules, rating systems, coverages, schedule of Rates and approved title insurance policy forms, endorsements and other forms for use by members of and subscribers to the Delaware Title Insurance Rating Bureau (“DTIRB”). Just as in PA and NJ the majority of all DE title insurers are members of the DTIRB. Here is a link about Delaware Title Insurance and the related rates and fees.
Without being to cumbersome by listing every state and where their regulated rates come from it is simply important for a consumer to recognize that many States do have uniform rate tables. Hence, the actual title insurance should be the same from title company to title company in that particular state. What often distinguishes the title company from another are the ancillary fees that the rating bureau’s don’t monitor, mandate or control. When in doubt consult with a local real estate attorney and be sure you are using a reputable licensed title company that is charging you only the rates they are permitted to do so.