Title Insurance is commonly purchased when buying or selling real estate.
Most states are called “Filed Rate” states, which basically means that their rates are not set by state law. They are either set by a rating bureau or each individual underwriter that operates in that state.
Whereas in other states like Florida and Texas, which are “promulgated rate” states, the rates are set by the state governing body.
Essentially, in filed rate states, such as Tennessee, Ohio, and Connecticut, title insurers do not charge the same rates so it could make sense to shop around.
Keep in mind that your title insurance rate is not the same thing as your total closing costs. In fact, it is only one component of your real estate closing costs. So where one underwriter may charge you less for title insurance itself, they may charge you more overall in the form of attorney, closing, or title search fees.
A Full list of Filed Rate states
Here is a list of filed rate states:
- Washington D.C.
- New Hampshire
- New Jersey
- New York
- North Carolina
- North Dakota
- Rhode Island
- South Carolina
- South Dakota
- West Virginia
Most filed-rate states have selected either the “file-and-use” or “use-and-file” methods although some also use one called “prior-approval.”
The difference between the systems is in the items that get reviewed by the insurance department. For example, in prior-approval rate systems, the insurance department conducts an analysis of claims and other data supplied by the insurer to justify the filed rates.
Next, in file-and-use states a review is conducted by the insurance department, and the title agent is typically permitted to begin using a rate as soon as it is filed with the department, or after a specific number of days have passed once the filing is made. Whereas, in use-and-file states, the title agent may begin using a rate BEFORE it files the rate with the insurance department.
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