For the first time in 10 years, the Pennsylvania Department of Insurance has approved an increase in title insurance costs, which will be effective for all closings occurring on or after July 1. In addition, the manner in which title charges are calculated will be simplified.

Title insurance can be highly regulated, as it is, for example, in Delaware, New Jersey and New York, where the cost of insurance is strictly set by each state’s Department of Insurance. In some states, rates are negotiable, but there may be caps and floors to the permissible charges. Other states are very much unregulated and allow for totally negotiated costs. Pennsylvania’s current rate structure is somewhat unique in its approach in that it maintains a two-tiered system that is strictly regulated up to a certain threshold amount, which has changed over the years but which is completely negotiable for liability amounts above that threshold. For the past decade or so, the rates were set for transactions up to $30 million and insurance purchased above that amount has been unregulated as to price. As a result of the new changes, costs will be set for all transactions, including that portion of the insurance policy that is over $30 million.

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