New Texas Title Insurance Rates: Rate Hearing in Progress

Texas title insurance rates are subject to change soon. The Biennial Rate Hearing began September 14th and is underway. In such hearing, various industry witnesses and government agencies, such as the Texas Department of Insurance, provide testimony regarding what is the appropriate price for title insurance in Texas.

In February of this year, TLTA (Texas Land Title Association), a trade association for the Texas title insurance industry, called for an increase of the current basic premium rate level by 13.55%. TLTA bases its recommendation on the fact that, despite Texas’s economy being more robust, the outlook for housing activity in Texas is still weak. The Texas Department of Insurance recommends no change in the Texas basic title premium rate. Meanwhile, the Office of Public Insurance Counsel recommends that the current basic premium rate is excessive and should be reduced by 11%.

The one fact I have not read much discussion on yet is the increase in the number of claims and how that might affect title insurance rates (and perhaps I just have not come across it yet). However, when talking to underwriting attorneys, who are charged with the decision whether or not to remove questionable liens from a title commitment, they have a heightened fear of litigation than they have in the past. Additionally, when reading the annual reports of the major title insurance companies, they report claims increasing. An increase in claims would surely put upward pressure on title insurance rates. However, whether or not it countervails the downturn in the real estate markets we have experienced during the last few years is another question.