The cost of title insurance does vary. Homebuyers should shop.

Too often, I hear real estate professionals telling homebuyers or borrowers that "title insurance is all the same – no reason to shop." This frequently shared conventional wisdom is only partly true.

While the terms of coverage are virtually the same, the cost of the title insurance premium does vary. Since choosing a settlement company is the right of the homebuyer, the homebuyer/borrower should take time to shop for the best title insurance rates.

Many state insurance commissions, including the District of Columbia and Maryland, require title insurance underwriters to file their respective rates. As a result, the filed title insurance rate premiums do vary among the several underwriters.

Depending on the settlement company’s underwriter, a particular settlement company, for the exact same coverage, may offer lower title insurance premiums than their competitors.

Take, for example, Federal Title’s title insurance premium of $1,588.00 on a Maryland purchase with a $450,000.00 coverage amount.  

Nearly every competing settlement company quotes and charges a premium of approximately $1,838.00 – or, approximately $250.00 more than Federal Title for the exact same terms/amount of coverage.

The bottom line is that consumers (i.e., homebuyers and refinancing homeowners) should exercise their right to choose their own settlement company and in so doing, take a few minutes to shop both the settlement charges and the cost of title insurance.

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