What is Title Insurance in Maryland?

Title insurance is an important cost component within Closing Costs that always intrigues a first time home buyer. Title insurance in Maryland protects buyers and lenders from financial liabilities that may arise due to a title defect or a hidden lien. 

Have a look at our Title Insurance explainer video to see how title insurance can protect your lender and your ownership in case of a title defect. 

There are two types of Maryland title insurance policies: Lender’s Title Insurance Policy and Owner’s Title Insurance Policy.

Lenders in Maryland often require borrowers to purchase a Maryland Lender’s Title Insurance Policy which guarantees protection for Maryland lenders against issues arising out of defects on the title of a Maryland property. On the other hand, the Maryland Owner's Title Insurance Policy protects the buyer against claims and liens. 

Title insurance policy premiums in Maryland show up as an itemized list of a closing cost worksheet for a buyer and seller such as a Closing Disclosure, Loan Estimate, HUD-1, or an ALTA Settlement Statement. If you're looking to get a preview of what these costs look like, use this free Maryland title insurance calculator.

How much does Title Insurance cost in Maryland?

Maryland is not one the most happening states when it comes to volumes of real estate transactions. The average value of homes sold in Maryland is $358,359. 

Overall, a property of $350,000 costs $1,610 for the owner’s policy while a sum of $200 is charged for the lender’s policy that safeguards the lender. 

Here are some more use cases:

  • For a purchase price of a $350,000 property in Maryland with a 20% down payment ($70,000), the cost of title insurance policy and lender's policy are $1,610 and $200 respectively. 
  • For a purchase price of a $350,000 property in Maryland bought with full cash, the cost of the title insurance owner's policy is $1,610. 
  • For a purchase price of a $500,000 property in Maryland with a 20% down payment ($100,000), the cost of the title insurance owner's policy and lender's policy are $2,225 and $200 respectively.
  • For a purchase price of a $500,000 property in Maryland bought with full cash, the cost of the title insurance owner's policy is $2,225. 
  • For a purchase price of a $1,000,000 property in Maryland with a 20% downpayment ($200,000), the cost of the title insurance owner's policy and lender's policy are $3,975 and $200 respectively. 
  • For a purchase price of a $1,000,000 property in Maryland bought with full cash, the cost of the title insurance owner's policy is $3,975. 

Since most buyers opt to go for simultaneous issuing of both policies, we have considered $200 as the cost of the Lender’s Policy. 

How is Title Insurance Calculated in Maryland?

Maryland has 6 pricing slabs for both owner’s and lender’s policy to help you calculate the net amount. These are:

Property Rate Cost of Owner’s Policy (per $1000)
$0 - $250,000 $4.80
$250,000 - $500,000 $4.10
$500,000 - $1,000,000 $3.50
$1,000,000 - $5,000,000 $2.75
$5,000,000 - $15,000,000 $1.50
$15,000,000 + $2.50

 

Say you want to calculate the cost of the owner's title policy for a $300,000 property. The total cost will be 

    (250000/1000) x $4.80

+  (50000/1000) x $4.10

_____________________

= $1,405

What is the Owner's Title policy in Maryland?

The owner's policy is a legal document that shields the owners from unknown defects such as missing heirs, incorrect documentation, unjust court proceedings, and protects their ownership. The owner’s policy contributes to the majority of the costs that go into purchasing the title insurance. 

What is Lender’s Title policy in Maryland?

The lender’s policy protects the lender from title defects such as a pending construction lien on the property, errors in the title, and other issues that may arise after the title has been transferred to the buyer. 

What is not covered in Title Insurance in Maryland?

Title insurance may not cover the following:

  • Losses due to infestation
  • Damage repair of the house after the purchase of property that did not show up in the inspection.
  • Damages due to natural calamities such as thunderstorms.
  • Damage due to a fire

How long is the title policy valid in Maryland?

The title policy remains valid till the time you remain the owner of the property. Only when you decide to sell, a new policy must be made in the name of the buyer. 

Who regulates Title Insurance prices in Maryland?

The Maryland Insurance Administration is responsible to provide or terminate licenses to title companies. The body also lays out rules against improper premiums and charges. Apparently, Maryland also has anti rebate laws that prohibit giving rebates in any form in order to keep the market competitive. 

Who pays for Title Insurance in Maryland?

The cost of title insurance is negotiable in Maryland but buyers generally expect the seller to pay. It won’t be incorrect to say that it is customary for the seller to pay for both policies. 

Is Title policy required in Maryland?

While the lender's policy safeguards the lender from liens, unknown defects such as missing heirs, incorrect documentation, unjust court proceedings, etc. have shown up and threatened the ownership of buyers across the country. These contingencies cannot be predicted using  

This is where the owner's policy shields the owners and protects their ownership. Hence, it is always recommended that the owner's policy be purchased along with the lender's policy.

As a general rule of thumb, it is always best to go for title insurance irrespective of the fact that it is mandated by the state or not.

Should you shop for title insurance in Maryland?

You can definitely shop for title insurance in the state of Maryland by approaching any reputable title company. However, if you are skeptical, you can ask your agent or lender to help you out with the process.  

Is there any discount on Title Insurance Policy in Maryland?

Technically there is no discount on title insurance in Maryland. But what you can do is go for simultaneous issuing of both Owner’s Policy and Lender’s Policy at the same time. This way you only pay a fixed amount of $200 for the Lender’s Policy.