Title Insurance Policies Standard Form Provide Legal Certainty That

  • Post author:
  • Post category:Uncategorized

[69] See Federal Trade Commission v. Ticor Title Ins. Co., 504 U.S. 621 (1992), which found that some states have little or no oversight of title insurers, particularly with respect to their premium rates. You can get an estimate of the cost of title insurance in your area using Old Republic`s rate calculator and Fidelity National`s rate calculator. You can also get a quick quote from First American Title`s fee calculator or Stewart`s price calculator. You may be able to get estimates for other closing services at the same time. In my experience, the main reasons for these differences have not even been noticed or accounted for in the various government-sponsored studies. A very important factor is losses. The top three sources of losses for title insurers are counterfeiting and fraud leading to title failure, mechanic privileges filed after the insurance date for which the policy provides coverage, and escrow theft. Some states have large losses in one or more of these three categories, while other states have small losses of this type. States where losses due to counterfeiting, mechanics` privileges, and escrow theft also have higher title insurance premiums. The states with the highest losses were California, New York, Florida, Nevada, Illinois, Michigan and Missouri.

These states also have high title insurance premiums. The most important factor is that, as with other lines of insurance, premiums are based on the sum insured. A higher amount policy costs more. All loans and transactions are at different prices. By combining the premium costs of many transactions into very different amounts, no “average” cost can be calculated. One researcher noted that title insurers charge a higher premium for a policy with a higher amount of insurance. [92] The same researcher blithely stated that “the cost of providing title services bears little relation at most to the amount of the loan or the value of the property (because payments on policies are so rare)…” This is simply not true. In my experience, the dollar amount of claims paid in the same four States is consistently higher than in most other States. If the property has a higher value, any easement or loss of boundaries is of a higher amount than if the property were worth less.

Thus, premium costs and losses are higher in states where all real estate is worth more money. Another factor is whether a state allows the insured to sue for what is called “extractive liability” under both policy terms and tort. States that allow capture or liability claims result in higher compensation for otherwise comparable losses, resulting in higher premiums. [110] There are currently underwriting offices in Delaware, New Jersey, New York, North Carolina, Ohio, Pennsylvania and Oregon, which include title insurers who underwrite insurance in those states. Other states, such as Wisconsin, had rating boards that have since been dissolved. The Delaware Title Insurance Rating Bureau (“DTIRB”) is licensed by the Delaware Department of Insurance. [71] The New Jersey Land Title Insurance Rating Bureau (“NJLTIRB”) files rate and form manuals with the New Jersey Department of Banking and Insurance on behalf of title insurers who underwrite insurance in that state. [72] The Title Insurance Rate Service Association, Inc.

(“TIRSA”) acts as the rate-filing agency for title insurers in the State of New York. [73] The North Carolina Title Insurance Rating Bureau (“NCTIRB”) files a rate manual with the North Carolina Department of Insurance, the most recent manual having come into effect on March 1, 2012. [74] The Ohio Title Insurance Rating Bureau, Inc. (“OTIRB”) is licensed by the Ohio Department of Insurance as a rating bureau and offers rates that are used by all its members. [75] The Title Insurance Rating Bureau of Pennsylvania (“TIRBOP”) is also licensed by the Pennsylvania Insurance Department and submits rates on behalf of its members. [76] Not all title insurers in Pennsylvania submit rates through the ITNBOP. [77] In Oregon, all title insurers currently submit their rates through the Oregon Title Insurance Rating Organization (“OTIRO”). The first OTIRO notation manual I found was in 2006. [54] See §§ 4.2.2 of Birny Birnbaum`s report describing practices in Northern and Southern California, found in www.insurance.ca.gov/0400-news/0200-studies-reports/upload/CATitleCompetitionReport0512Public.pdf (last accessed March 20, 2016). See also the Department of Business Oversight`s FAQ page on independent trusts regulated by the Department of Business Oversight at www.dbo.ca.gov/Licensees/Escrow_Law/FAQs.asp#13 (last visited March 20, 2016).

The final important factor in the cost of title insurance related to claims experience is the relative cost of state-to-state litigation. Title insurers pay about two-thirds of their claim costs to defend policyholders in litigation. States where lawyers charge higher rates and litigation takes longer and is more expensive have higher damages, which increases title insurance premiums. California, Florida, New York, New Jersey, Georgia, Texas and Illinois are costly states for litigation. There are no insurance “dangers” in the title world. There are no floods, fires, earthquakes, tornadoes, or storms sweeping away the titles of many packages. Title insurance does not protect against risks that may arise in the future. It does not protect against future events.

With minor exceptions, insurance is only provided for defects in ownership, liens or encumbrances that already existed at the time of the policy. There can be no diversification of risks among a pool of insured securities. The risks assumed in each policy are based solely on the defects, privileges and charges affecting the insured package(s). The title of each plot is unique and different. You can follow your lender`s recommendation, as their financial interests in the property coincide with yours. However, some lenders also have a financial interest in the securities companies they recommend to borrowers. Modern lender`s title insurance also provides coverage through the mortgage whose lien is insured. This policy indemnifies the insured in the event that the mortgage is not valid, does not have the priority specified in the policy, or is not enforceable by foreclosure.