This page explains how the cost is set and how it differs from the other title and settlement charges. The taxes due at settlement are on our Maryland closing costs page.
Two policies, two premiums
- Lender’s policy. If you take out a mortgage, your lender will usually require one. It protects the lender, up to the loan amount, and its coverage shrinks as the loan is paid down.
- Owner’s policy. Optional in Maryland. It protects your own ownership and equity for as long as you, or your heirs, own the property. Its premium is paid once, at settlement, like the lender’s.
What an owner’s policy protects against, from forged deeds to unknown heirs, is set out on why title insurance.
How premiums are set in Maryland
Maryland law requires every title insurer to file its rates and premiums, and its policy forms, with the Maryland Insurance Commissioner, and an insurer may not change them until the change has been filed and approved. So the premium is not set file by file. It is worked out from the insurer’s filed rate manual, mainly from:
- the amount of coverage: the purchase price for an owner’s policy, the loan amount for a lender’s policy;
- the kind of policy and any endorsements your lender asks for;
- whether a lower rate in the manual applies, for example a rate for a lender’s policy issued at the same time as an owner’s policy, where the manual provides one.
Our policies are underwritten by Stewart Title.
Premiums versus settlement charges
The premium is only part of the “title” lines on a Closing Disclosure. The others pay for services rather than insurance: the title search and examination, the settlement or closing fee, document preparation, and similar work. Those service fees are not part of the insurer’s filed premium, and they appear as separate lines. When you compare quotes, compare the whole set of title and settlement charges, not just one line.
Your lender must get the Closing Disclosure to you at least three business days before the loan closes, which gives you time to check those lines.
Refinancing
A refinance needs a new lender’s policy for the new loan. An owner’s policy you bought earlier is not replaced; it stays in force while you own the home. Some rate manuals include a lower “reissue” rate when the property was insured recently, and it is often used on refinances. Whether it applies depends on the insurer’s manual and on the earlier policy, so send us a copy of your prior policy if you have one.
A refinance by the original borrower also has its own recordation tax rule: tax is due only on new money above the unpaid balance being refinanced. Ask us about your refinance at (410) 768-2300.
Getting a figure for your property
We do not print sample premiums on this page, because the figure depends on the price or loan amount and on the current rate manual. Our instant quote gives title charges and a fuller settlement estimate for your price and county in a few minutes, or call us at (410) 768-2300.
How we help
Our settlements are led by attorneys. We search the title, issue the lender’s policy and, if you choose one, an owner’s policy through Stewart Title, show every premium and fee on the settlement statement, and get the deed or mortgage recorded in the right county. You can settle at our Glen Burnie office, or we come to you anywhere in Maryland at no extra cost.