Selling or refinancing your home in Florida: How can I save money on my Title Insurance?

Title insurance rates in Florida are set by state statute. This means that the rate for title insurance is standardized throughout the state. The rates will be the same whether you close with a real estate attorney or a non-attorney title company. According to state statute the cost of title insurance is $5.75 per $1,000 of the amount of the insured amount up to $100,000. Any purchase amount above $100,000 is charged at $5.00 per $1,000. Fortunately for consumers, title insurers and state regulators have created ways to earn discounts on these promulgated rates.

REISSUE RATE a.k.a. “REISSUE CREDIT”
The most common title insurance discount is the Reissue Rate. You may also hear it referred to as Reissue Credit. Reissue rate can result in a rather substantial discount for purchasers of title insurance. But before we get to the amount of the discount, let’s discuss what is required to qualify for it.

First you must PRESENT YOUR PRIOR OWNER’S TITLE POLICY FOR A DISCOUNT. The primary requirement is the existence and presentation of a previously issued Owner’s Policy of title insurance that insures the current owner of the property (this could be the seller in a purchase transaction or the owner in a refinance transaction). This is called the “prior policy.” The current owner must be able to present a copy of their prior policy to the closing agent, prior to closing, in order to qualify for the credit. For most homeowners, their prior policy would have been issued by the real estate attorney or title insurance company that insured their purchase of the subject property.

For a purchase transaction the prior policy must be less than three years old. In other words, the reissue rate would not apply if a homeowner sold their home 4 years ago (assuming of course that the only prior policy was issued upon purchase). There is no such age limit in a refinance transaction. Reissue rate applies in these transactions whether the prior policy is 1 year old or 10.

So what type of a discount are we talking about? Let’s take a look at an example. Say you purchased a property in 2015 for $100,000 and received an owner’s policy of title insurance for that same amount. In 2017, you decide to sell the property for $145,000 and you provide a copy of your prior policy to the closing agent prior to closing. The original title insurance rate (without the reissue rate) for $145,000 is $800. With a reissue credit, the actual title insurance rate in your transaction would only be $555. That is a savings of $245 or 30.625% from the original rate.

As you can see from this example, a reissue credit can be a great way to save money when purchasing title insurance. If you would like to know if a transaction qualifies for a reissue credit, and how much of a credit is available, call us today (727)669-3909 or send us a request for a title quote by visiting us online at www.palmatitle.com