A one-time premium taken off the insurer's filed rate schedule and scaled to the purchase price for an owner's policy and the loan amount for a lender's, which on a typical home runs from several hundred dollars to a couple of thousand, with a simultaneous-issue discount when one company writes both.
Title insurance is priced unlike anything else at closing. There is no renewal, no deductible in the ordinary sense, and no quote that moves with your credit or your claim history. There is a rate schedule the insurer has filed with the state, a number the schedule is applied to, and a discount for taking both policies from the same company. That makes the cost predictable and makes shopping worth less than people expect.
How the premium is calculated
Title insurers file their rates with the state regulator, in Nevada the Division of Insurance, and charge from the published schedule rather than quoting a price. The schedule is a sliding scale: a base amount for the first band of value, then a declining rate per thousand above it, so the premium rises with the price but not in proportion to it. The owner's policy is written for the purchase price. The lender's is written for the loan amount.
The simultaneous issue rule is why both policies come from one company. Where an owner's policy is being written, the lender's policy is added for a small flat charge instead of a second full premium. Splitting the two between companies costs materially more and buys nothing extra.
What a purchase here looks like
On a $450,000 purchase with a $405,000 loan in Clark County, expect the owner's policy to land somewhere in the high hundreds to low thousands of dollars, and the lender's policy, issued at the same time, to add roughly a hundred to a few hundred more. Escrow's own fee is separate, typically several hundred dollars a side. Recording fees, a document preparation charge and any courier or wire fees are separate again.
The loan estimate the lender issues within three business days of the application lists every one of those lines, and the closing disclosure repeats them with final figures. Comparing the two documents line by line is how a buyer sees what actually changed.
What moves the number
- The price and the loan amount, since those are the figures the two schedules are applied to.
- A reissue rate, where a prior owner's policy on the same property can be produced. Many insurers discount a new policy on a recent one, and the rules on how recent are in the filed rates.
- The form: a standard owner's policy against an extended or homeowner's form, which covers more and costs a set percentage more.
- Endorsements the lender requires, usually a handful at a small charge each.
- Who pays, which does not change the premium at all. Custom moves the line to the other column of the settlement statement, and in Clark County the owner's policy is customarily the seller's line.
Why it costs what it costs
Most of the premium is not priced as expected losses. Title insurers spend the bulk of their revenue on the search and on curing defects before they can become claims: examining the chain of title, chasing releases, clearing old liens, resolving names. The industry's loss ratio is low next to property or casualty insurance, which is both a standing criticism of the product and an accurate description of what it is, which is work done in advance and sold as a policy.
Questions people ask
Is title insurance a one-time fee?
For the owner's policy, yes: a single premium at closing covering the whole period of ownership, with nothing to renew. A refinance requires a new lender's policy because the new loan is a new lien, but the owner's policy is unaffected by it.
Can you shop around for title insurance?
You can, and the loan estimate marks title services as shoppable. Because premiums come from rates filed with the state, they vary less between companies than the escrow, settlement and document fees do, so that is where the differences usually turn up.
Why is the lender's policy so much cheaper than the owner's?
Because it is issued alongside the owner's policy, and the filed rates charge a small simultaneous-issue amount for the second policy instead of a full premium. Standing alone, on a refinance where no owner's policy is written, a lender's policy costs considerably more.