Posted by Robert522TX on 5/5/13 5:32pm
Msg #468833

Title Insurance Rate Quietly Increased in Texas



Title Insurance Rate Quietly Increased in Texas

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http://www.ktbb.com/post/?p=255879

AUSTIN (AP) — Texans started paying more last week for title insurance as a result of a price hike quietly approved in March by the state insurance commissioner. The Austin American-Statesman reports that the 3.8 percent increase is the first in 22 years. The Texas Department of Insurance and the Office of Public Insurance Counsel recommended the rate hike. Aaron Day, a lobbyist for the Texas Land Title Association, says the increase is justified by data submitted by the industry and the loss of business it suffered during the housing downturn. But Birny Birnbaum, executive director of the Austin-based Center for Economic Justice, which advocates for consumers, called it “absurd.” The increase will generate an estimated $53 million more per year for Texas title companies and their underwriters, the newspaper said.

Reply by Linda_H/FL on 5/5/13 5:47pm
Msg #468834

When you consider the risk undertaken by title

companies, I'm not surprised. Insuring things today at 22 year old rates is crazy

Reply by BrendaTx on 5/5/13 6:11pm
Msg #468835

Except that the rate has floated on the amount

that the title is insured for and there is very little risk for established title plants.

A property 22 years ago was worth $50,000. Title got $500.

The same property is probably worth $175,000 now. Title company collects $1750 (1%). Of the $1750, the insurance policy is paid for with 15% ($262.50) and 85% ($1487.50) goes to the title company that does the closing and researched the title. In some instances, the $1487.50 is split 50/50 with the attorney or escrow agent that does the actual signing--that 50% of the 85% is gravy.

Now the title insurance will cost 1.38% or $2415...the splits will undoubted stay the same. 15%/85% and 50/50 on the 85%.

Reply by HisHughness on 5/5/13 8:56pm
Msg #468854

Re: Except that the rate has floated on the amount

I am unclear what the increase actually is.

Is it 3.5 percent, which I think would make the current rate 1.035 percent, or is the new rate 1.38%, which is an increase of more than one-third over the previous rate of 1%?

Reply by BrendaTx on 5/5/13 9:34pm
Msg #468857

I believe that you are right. 1.038%

If 3.8% increase is correct, then you are correct.

Darn...guess we won't be getting increases in signing fees after all.

Better rate - thanks for clarifying.

Reply by BrendaTx on 5/5/13 6:13pm
Msg #468836

Aw, Robert, you know that they will pass that on to

notaries!

After all, that's $1380 premium on every $100,000 policy. (or, roughly).

Reply by Robert522TX on 5/5/13 6:18pm
Msg #468837

Re: Aw, Robert, you know that they will pass that on to

Looking forward to it, Brenda!!

Reply by BrendaTx on 5/5/13 6:31pm
Msg #468839

Thanks for posting. n/m