YOU ASK:

What is a reissue rate on title insurance and how is this rate different from the typical rates for title insurance?

WE ANSWER:

When we say "reissue", it means that the title insurance company agreed to cover or provide title insurance protection for the same piece of property, a property that they have already provided title insurance coverage for. This usually happens in the event that ownership of the property has changed or when the owner decides to have the mortgage of the property refinanced.

For instance, you bought a house and a title insurance policy. Then, you sold that house. The buyer decides to buy the title insurance from your title insurance company. Since the title insurance company already has done a title search on that particular, all it has to do is check whether the transfer from you (the seller) and the buyer is legal and proper. And because less effort is required, then less premiums are also charged. Reissue rates can be up to 40% to 60% cheaper than the typical rate.

For title insurance, the longer the property is owned, the more chances there are that problems with the deed will come up. For example, there would be more heirs as years pass by. The original owners will have children, and then grandchildren. The owner could also remarry - titles can be contested and so on. If the property has been in your possession for a relatively short period of time, then the rates may be lower, as compared to a reissued title insurance policy for the sale of property that has been in the company for the last 30 years.

When a property changes ownership at a faster rate, the possibility of problems cropping up regarding the deed would be smaller. If, for instance, you bought a property (along with title insurance) and sold that property six months later, the chances of problems arising during that six months would be little.

The same goes for property that does not change hands but is being refinanced. For example, if you have an existing mortgage on your house and you decide to have that mortgage refinanced, the new lender will require that you get title insurance. Of course, since you already have title insurance on the property, a reissued title policy should be cheaper.

Thus, the reissue rate is really a discount on standard premiums and is usually available for refinanced home loans, as well as on the resale of the house.

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