California Real Estate Practice Exam

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How are title insurance premiums typically determined?

  1. By state law

  2. According to local custom and negotiation

  3. Fixed national rates

  4. A flat fee based on property value

The correct answer is: According to local custom and negotiation

Title insurance premiums are typically determined by local custom and negotiation because they are dependent on several factors such as the location of the property, the value of the property, and the title insurance company. Each state may also have its own set of regulations and laws governing title insurance premiums, but it is ultimately up to the individual title insurance company to determine the premiums based on these factors. Fixed national rates and flat fees based on property value are not commonly used methods for determining title insurance premiums.

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