Property Insurance

Do Texans pay too much for title insurance?

(STAR-TELEGRAM) - In Texas, unlike every other state except for Florida, the state sets the rates for title insurance, so there’s no way for homeowners to shop for a better deal.

Rates are reviewed every two years. They were reduced 6.5 percent in 2004 and 3.2 percent in 2006, but stayed the same in 2008.

Currently, the rate is about $843 for a $100,000 home.

There’s evidence, though, that the rates are too high, according to a report by the Government Accountability Office.

The 2007 report quoted figures from Bankrate.com, which examined rates in each state’s largest urban area. It found that the average rate nationwide for a $200,000 loan was $663.

For that amount, title insurance companies may only have to do a few seconds of work, the report says.

Typically, title insurance companies have detailed databases, known as title plants, that show the ownership history for every piece of land in a county.

“During a tour of one title plant in Texas, we observed a title examiner obtain nearly all documents pertinent to the title search and examination in electronic format within seconds,” the GAO report says.

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