The cost of title insurance is a premium paid at the onset of the policy.
Due to the wide use of title insurance in property transactions, many states regulate its cost in an effort to protect consumers. When this is the case, government authorities will require insurers to provide a schedule of fees that is indicative of their charges. Accordingly these will be collated and approved, and then published to the community at large.

Title insurers in regulated states are unable to breach the standard set by the authority and so this serves as a reliable guide when owners are factoring in their expenses.

However, many states will require that a policy be visited by the independent advice of a legal representative. This serves to protect both the insurer and the policy holder against any vitiating of the policy which is itself a legally binding contract with specific terms.

In this situation, it is imperative that a legal representative be engaged to review the policy and the cost maybe separately due as the obligation of the policy holder. The cost of a legal representative in this instance is not regulated in regard to title insurance.

Further costs that are not immediately apparent may exist in the form of underwriting tasks that an insurer charges for specific performance of due diligence on its part. These are usually to do with searching and tracing title in accordance with any statutory requirements that may exist in a particular state. While these fees are necessarily incorporated into the risk management procedures of the insurer, they are rarely waived in favor of the policy holder.

How much is Title Insurance?

Again, depending on the applicable state, the cost of residential title insurance will vary.

Of course the amount of an owners title insurance policy is at their discretion, but for $180,000 worth of cover the cost of title insurance incurred by the policy holder will be anywhere from $700 in Maine to $1,400 in Texas.

First American Title Insurance Company is arguably the largest in the United States and the internationally, with the largest market share in the title insurance industry of 30%. This would invariably be due to their quality of service and competitiveness, but the fact that they have the resources to efficiently administer their polices also needs to be taken into consideration.

Fidelity National Financial is also a large competitor in the title insurance industry with a market share of approximately 26%. Together these two giants comprise almost 60 % of the title insurance industry and while competition is advantageous to consumers, in the matter of title insurance the largest players in the market appear to have constructed a relatively duopolistic environment for themselves.

How much does title insurance cost? It may be surprising to note that the title insurance industry has in excess of $15 billion in premium revenue from title insurance costs with only 4% of this premium being paid out in claims.

This astounding fact may be seen as justification for the proposition that title insurance is overpriced, however, considering the uncertainty inherent in the title registration systems of most states, and the alternative of costly reformation of the existing deed registration process in each state, the assumption of risk by experts in their field ought to be acknowledged and accepted as one that is transferred in return for the consideration of a premium.

The peace of mind alone enjoyed by the owner of property is enough to justify the premium, after considering the sometimes dire consequences of purchasing a property which is absent of clear title.

The fact that the cost of litigation needed to defend title is included in title insurance policies is also a major advantage to the policy holder.

Resources:

http://money.cnn.com/2006/01/11/real_estate/title_insurance_exposed/index.htm

http://www.kiplinger.com/basics/managing/insurance/title.html

http://www.mtgprofessor.com/a%20-%20title%20insurance/questions%20about%20title%20insurance.htm