When it comes to title insurance there are significant cost variables between states, as well as urban and rural areas. As a heavily regulated industry (more regulated in some states than others), insurance premiums are often set or pre-approved by the regulators. The underwriters will typically file their rates for use in a given state. Those rates will be subject to scrutiny by the state insurance regulator.
In some states you can deviate from filed rates. So if it’s a large dollar transaction you may not have to pay the full filed rate and may therefore be able to deviate from the filed rate. In other instances, the state may mandate that you stick to the filed rates.
Costs Vary Among States
To make matters more confusing, filed rates are not uniform among states. A million dollar title insurance policy might cost $2000 in one state, and that same exact policy in a different state could cost $8000. So it’s important to consider that if you’re accustomed to paying certain costs in one state (premiums, closing costs, deed taxes, etc.), you should not assume it’s going to be the same in another state. In fact, the variance can be significant across states, with Florida being one of the more expensive states in the country for title insurance premiums. These premiums are set and mandated by the state, not the title insurance company.
City vs. Rural Costs
Costs can also differ based on whether the property is located in an urban or rural area. In rural areas where we can’t search the online records, we might have to get a full abstract and that can significantly increase the search costs. Understanding the local areas we’re dealing in is very helpful to keeping costs low for the client.