Shopping around for title insurance for your newly paid-for home in Texas won’t get you very far, if it will get you anywhere at all.
State regulators set the rate at a flat $2,663, so that comparison shopping becomes a self-defeating undertaking. Insurers offer this kind of coverage at a uniform rate, which leaves little room for competition.
A personal account by Doug Deason and Bob Rowling published in the
Star-Telegram recounts the challenges of getting insurance in a counter-competitive environment created by rigid regulation, such as that in place in Texas.
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The authors sit on the board of the civic organization Texans for Free Enterprise.
“Whenever government fixes the price, private industry doesn’t have to squeeze out efficiencies to compete,” the authors said.
Research by the duo also revealed that Texas is one of only three states left that regulate title insurance.
“If we make title insurance compete on price, poor and middle class Texans would save hundreds of dollars on title insurance…” they also wrote.
The two related that legislation to remedy the situation has been put forth in the state’s Upper and Lower Houses. Representative Sergio Muñoz introduced HB 4239 to deregulate title insurance rates in the state, while Senator Hancock sponsored SB 2203, which aims to improve transparency in title insurance practices.
“For families trying to make ends meet in the most anaemic recovery since the Great Depression, a few hundred dollars or more makes a great difference,” the authors said.
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