Kudos to our friends at Think New Mexico who achieved a big success in the recently-completed legislative session with the reform of title insurance, a form of insurance that is required when you purchase a home. As Fred Nathan, the head of Think New Mexico, pointed out, until the passage of these reforms, “Only three states in the country allow the government to set prices for the title insurance industry: New Mexico, Texas and Florida. As of 2006, all three states were in the top five for the price of title insurance, according to a 50 state comparison performed by Bankrate.com.”
While the legislation introduces some reforms, it does not create a purely free market. It does, however, move New Mexico in that direction. As Barry Massey of the Associated Press notes:
The state will continue to establish a price for title insurance but insurers can charge a lower rate in a county if it’s approved by the superintendent of insurance, who runs the division of insurance in the Public Regulation Commission.
Regulators also are to provide the public with information about title insurance rates for residential property. A listing of rates on the PRC’s Web site will allow consumers to shop for the best price.
Another provision in the legislation will provide for greater discounts on title insurance policies for homeowners refinancing their loans.
A fiscal impact report containing more information on the legislation is available here. The Governor is apparently going to sign the bill shortly.