But, like Strange, more people may decide to shop for title insurance. Since January 2010, a law has required lenders to provide accurate closing costs within three business days of receiving a mortgage application, allowing buyers to start looking early in the purchasing process.
"The new law absolutely has prompted an increase in consumer shopping across the board," said Timothy Dwyer of Entitle Direct Group Inc., a title insurer in Stamford, Conn. "A consumer who has an estimate can compare and contrast the charges."
The savings can be substantial. For a $1.5 million home in New York with a 20 percent down payment, Entitle Direct, which sells directly to consumers, charges $4,973 for owner and lender policies, compared with $7,650 for policies sold by many traditional insurers using agents, according to its rate manual.
Because each state regulates the industry differently, not all buyers will see the same savings.
Texas and New Mexico set rates for all insurers, while states including California, Maryland, and Nevada approve individual rates. Some, such as Oklahoma and Georgia, don't regulate rates, and Iowa forbids the sale of private insurance, selling the coverage itself.
Pennsylvania, New Jersey, Delaware, New York, and Ohio have rating bureaus, which are groups of insurers that in most instances agree to charge the same price.
Pennsylvania has an inclusive rate for title insurance, bundling the premium, the cost of executing the title search, and the settlement fee. The amount, about 1 percent of the sales price, covers the property for as long as the owner and his or her heirs own it; all title searching and examination, even multiple searches; and the costs of settlement.
