In straightforward terms, a reissue credit refers to a discount given to home buyers on the premium of an owner’s title insurance policy.
Title insurance is a type of insurance that helps protect property buyers and mortgage lenders from financial losses due to issues with the property’s ownership history. One important concept within title insurance is reissue credit. Let’s break down what reissue credit means in the context of title insurance.
Title Insurance Overview: When you purchase a property, you want to be sure that you’re getting clear and undisputed ownership rights to it. However, there can be hidden problems with the property’s title, such as unpaid liens, undisclosed heirs, or errors in public records. These issues can create problems for your ownership rights in the future. Title insurance helps safeguard against these potential risks by covering the costs of legal fees, damages, and financial losses resulting from title-related issues.
Reissue Credit Explanation: A reissue credit is a benefit or discount that is sometimes offered when you purchase a new title insurance policy for a property that has been previously insured. In other words, it’s a cost-saving measure that rewards property owners when they apply for a new title insurance policy on a property that already has an existing title insurance policy. Although there are some restrictions to the reissue credit, keep reading.
Reasoning Behind Reissue Credit: When you buy a property, the title insurance company conducts a thorough search of public records to uncover any potential problems with the property’s title. If you or the property’s previous owner had purchased title insurance in the past, that means a comprehensive title search has already been done. If there haven’t been any significant changes or issues since that previous title search, the risk to the title insurer is lower. As a result, they may offer a reissue credit to the new policyholder because they can rely on the earlier title search to some extent.
Benefits of Reissue Credit:
- Cost Savings: Reissue credits can significantly reduce the cost of purchasing a new title insurance policy. This is especially beneficial for property buyers and homeowners as it lowers the overall expense of securing title protection.
- Faster Process: Since the property’s title history has already been investigated, the title insurance company may be able to process the new policy more quickly. This can be advantageous when you’re in the process of buying or refinancing a property.
Important Considerations:
- Reissue credits are subject to certain conditions. These conditions can vary depending on the title insurance company and local regulations.
- The eligibility for a reissue credit often depends on the time frame between the previous policy and the new policy request.
- It’s crucial to discuss reissue credits with your title insurance company or agent to understand the specific terms, eligibility criteria, and potential savings.
In summary, a reissue credit in title insurance is a discount offered to property buyers or homeowners when they purchase a new title insurance policy on a property that has been previously insured. This credit acknowledges the previous title search and helps reduce the cost of obtaining title insurance, while still providing the important protection that title insurance offers.
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Title Junction is a full service real estate title company serving the area of Fort Myers, Cape Coral and the entire state of Florida since 2005. The company handles a number of real estate title services for both commercial and residential properties.
Have questions? Give us a call at 239.415.6574.
In case you missed it, check out our last Title Junction post: Is Everyone Getting Title Insurance?