SHOPPING FOR TITLE INSURANCE
Consumers are free to shop for title insurance and to select a title company to conduct their closing. Many consumers rely on their real estate agent or lender for a recommendation for a title company since they are in a position to know which companies provide good service. However, you are not required to use the title company they recommend. If you decide to choose your own title company, we encourage you to shop for title insurance since there could be dramatic price differences between companies. There are some things to keep in mind. And there are some terms you will want to know when speaking with title companies asking for a rate quote.
HOW TITLE INSURANCE RATES ARE SET
Title insurance rates vary from company to company and are primarily based on the size of the transaction, the difficulty of the title research and the existence of title insurance on the property prior to its sale. The rates are not set by the Office of the Commissioner of Insurance.
Some rates may or may not include other services provided by the title company such as conducting the closing, preparing closing documents, adding endorsements to the policy which may be required (usually by the lender or buyer), and other services. When comparing one rate to another, be sure to get detailed information on what is included in that rate, so you are comparing equally.
RATE TERMINOLOGY
Here are some terms that would be helpful to know when talking to a title company. Ask your title company which of these you may qualify for:
Basic Rate: The rate charged to a consumer who does not qualify for a reduced rate such as, but not limited to, the reissue rate or simultaneous issue rate. (see below).
Reissue Rate: The reduced rate for an Owner's Policy issued on a property which was previously insured within some period of years. The term is also used for a refinance rate (see below).
Simultaneous Issue Rate: The reduced rate for a Loan or Owner's Policy issued on the same property or loan at the same time as another policy. The term usually refers to a Loan Policy issued at the same time as an Owner's Policy when a property is purchased.
Refinance Rate: The reduced rate for a Loan Policy issued on the new loan in a refinance transaction, in which the original loan was previously insured within some period of years.
START SHOPPING
Now that you know some of the basics, you can start calling title companies in your area to ask for a rate quote. Remember to ask for details about what is included in the rate.
