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[quote=Anonymous][quote=Anonymous]DC rates are the highest in the nation - MoCo quotes are not comparable.[/quote]

DC's title insurance rates are not even in the top 10 of the highest.  The formula is incredibly complicated.  Your title insurance company can provide you a copy of the manual.  It is probably 20-40 pages long and varies by state.  The formula is tiered (ie you pay $x/ thousand dollars of coverage from $0-$250K and a slightly lower amount for $250-$500K, so on and so forth)

$5K sounds about right, for an enhanced policy.  A basic policy is 18% less expensive.  Basic is a good policy, enhanced is typical for this market.  There are 20 differences between the policies.  Ask the title insurance company for a list of the differences and you can decide which is right for you.

Title insurance is regulated, but not set in DC.  Title insurance underwriters set rates (which may not be lawfully deviated from).  All of the companies in DC underwrite through the same large 4 title underwriters- the underwriters are literally within dollars of each other.  There are some others that are less expensive.  They are generally internet companies or those that don't operate regularly in DC.  The insurance is just as good, but there is a high probability of error (you decide whether a covered mistake is worth your time for a few hundred dollars).  They have drastically less reserves and are not experienced in the market.  Personally I wouldn't accept a policy from them.  I would accept a policy from the following (the list is more than 4 since the 4 own subsidiaries: Fidelity, Commonwealth, Chicago, First American, Stewart, Old Republic,

No one tries to sell an owners title insurance at a refinance.  And DC law requires buyers to sign a written disclosure as to whether they want title insurance and the cost difference between basic and owners.  Title insurance in DC for the major underwriters is split between owners and lenders coverage.  However the formula is set such that an owners policy costs $x based on the sales price.  Any loan amount is $150 unless it is greater than the purchase price.  For example everyone buying an $800K house with any mortgage less than $800K will pay the same total for lender's and owner's title insurance, but the allocation will be different.  $800K cash will cost $150.

Not buying title insurance really is stupid (in fact I would say it is the dumbest legal mistake, after not having a will, that the average person could make).  It is like people not buying health insurance.  You will save money in the short term and might save money in the long term, but it is truly stupid.  While significant claims are very unlikely you could be entirely divested of the property if it happens and it does happen.  Ask any title company and they will tell you stories of massive claims, where without a policy the seller would have had complete loss of their home.

Finally, on pricing.  The settlement attorney makes between 70-85%, depending on the size of the company (larger companies make more).  But title insurance is not a pure insurance product.  It is substantially an attorney opinion letter for all discoverable title errors, coupled with insurance for undiscoverable items.  The attorney's work pre-settlement prevents and fixes most of the title problems.  It would be like paying your homeowner's insurance company to fireproof your house before purchasing fire insurance from them.  For the record, over 99% of buyers purchase title insurance.  No corporate buyer would forego title insurance.  Only a complete idiot would.

And one PS, if you purchased an owner's title policy you get a discount (generally 30-40% depending on the state) when you refinance on the required lender's policy.  So for the idiot who thinks he saved $10K over the years.  If you refinanced as much as most people did in the last 12 years, it actually was more expensive than not purchasing it (admittedly at 4% rates that might not be true today).
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