The Eastern Pennsylvania U.S. District Court last Friday certified a class action suit against Commonwealth Land Title Insurance Company brought by homeowners who clam they were overcharged for title insurance on refinances because they were never informed of statutorily discounted premium. ( Decision)
An article on Law.com this morning says that under Pennsylvania law, title insurance rates are governed by a statute that calls for a 10-percent “reissue rate” discount whenever a property owner purchases title insurance within ten years of obtaining a policy issued on the same property, and a 20-percent “refinance rate discount if the property owner applies within three years of obtaining a previous policy.
Plaintiffs in the action allege that Commonwealth agents should have known that prior insurance had been issued, and the discounts applied automatically.
Commonwealth argues that the law requires the purchaser of the policy to provide evidence of prior policies rather than relying on the insurer to uncover the policy in its title search.. Respective of the class action certification, and, contrary to plantiffs’ allegations, Commonwealth says “it is possible to obtain a mortgage or refinancing without title insurance in a variety of circumstances and that it is therefore impossible to conclude that every member of the proposed class who purchased insurance from them in the past three or ten years of obtaining a mortgage was eligible for a reduced premium.”
Judge Eduardo Robreno, who certified the action, found that the conflict didn’t defeat typicality and that the proper cure was to establish two subclasses, conditioned on the plaintiffs adding a representative for the reissue discount class.”
[Note: Rates that may be charged for title insurance are set out in the Title Insurance Rating of Pennsylvania Manual (TIRBOP Manual) governed by Pennsylvania Title Act, 40 P.S. 910-1 et seq. ]
Ohio, Kentucky & Indiana parallel statutes
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