Title insurance fees are charged when a person purchases title insurance. Title insurance works by guaranteeing a property title in the event there is a dispute over the ownership of the property in question or liens against it. The fees charged for title insurance vary, but are often in proportion to the value of the property for which title insurance was purchased. Usually, the term "title insurance fee" is used in reference to the purchase of a title insurance policy. It can also be used, however, to mean the cost a person pays for a title search.
Title insurance is often purchased when a person is buying a home or other type of real estate. Typically, a title search is performed to determine whether or not there are any roadblocks to passing on a lien-free title to the new owners of a property. The person or company who performs the title search usually takes every opportunity to ensure the title is clear before the sale of the property is finalized. In some cases, however, a claim on the title is missed. For example, if a signature was forged on the title in the past or a lien against the title is not uncovered in the search, the new owner could possibly lose some or all of the money he has invested in the property.
Title insurance fees can cover just the cost of a title insurance policy, but that is not always the case. Often, fees for title searches and exams are combined with the cost of title insurance instead of charged separately. It’s important to note, however, that title insurance fees are not handled the same way in all places. Each jurisdiction may have unique laws for how they are handled, but companies are usually allowed to set their own fees as long as they adhere to the jurisdiction’s laws.
In some places, title insurance companies are required by law to set rates and file them with the jurisdiction’s insurance commissioner’s office or a similar office. Once the fees have been set, however, the title insurance company is generally required to stick to them. This means it is not permitted to charge one customer basic rates and another customer higher-than-usual rates.
Sometimes title insurance fees are set by the individual title insurance companies but depend on minimums set by the jurisdiction. For example, a jurisdiction may set a minimum amount that a title insurance company must charge by law, but the company may charge more than the minimum if it wishes. Where this applies, title insurance companies can set their own rates, but they all start with the same rate foundation.