Understanding the Re-Issue Rate in Title Insurance
Buying and selling real estate most often involves title insurance, a safeguard designed to protect against defects or issues related to a property’s title. If you’re considering refinancing or purchasing a property that was previously insured, you may benefit from something known as a re-issue rate. This article breaks down what a re-issue rate is, how it works, and why it might save you money.
What Is a Re-Issue Rate?
A re-issue rate (also called a reissue credit or reissue discount) is a reduced premium for title insurance when the property in question was covered by a prior title policy within a certain time frame. Essentially, the title company can discount part of the cost because much of the title research and underwriting from the previous policy still applies.
Key Point: The title insurer reuses information from the earlier policy and updates it as needed, which often involves less work than starting from scratch. This savings gets passed on to you in the form of a lower premium.
When Does a Re-Issue Rate Apply?
Re-issue rates usually apply in scenarios such as:
Refinancing – If you refinance your mortgage and already have an Owner’s Policy or Lender’s Policy for the current property.
Purchasing Recently Insured Property – If the seller’s property was covered by a title policy in the recent past and you’re buying from them.
Short Gaps Between Transactions – Many title companies set a time limit (often within 2–10 years of the original policy) to qualify for the re-issue rate.
Every title company has its own rules for how recently the policy needs to have been issued to qualify, so it’s important to confirm the exact timeline with the company you’re working with.
How Much Can You Save?
The discount varies by:
Title Company – Each company sets its own re-issue rates or discounts.
State Regulations – Some states regulate title insurance rates, while others allow more flexibility.
Time Elapsed – The closer the previous policy date is, the higher the potential discount in many cases.
Savings might range anywhere from 10% to 40% off the standard title insurance rate, depending on these factors.
How to Qualify for a Re-Issue Rate
Provide Proof of Prior Coverage
You’ll typically need to show a copy of the previous policy (or at least relevant policy details) to demonstrate that the property was recently insured.Work with a Title Company That Offers Re-Issue Rates
Not all title companies automatically apply a re-issue rate. Ask about their policies and whether you qualify before finalizing your selection.Confirm Time Limits
Make sure you’re within the allowable window. If it’s been too long since the original policy was issued, you may not be eligible for the discount.
Common Misconceptions
You Only Get a Discount for Refinancing
While refinancing is a common situation where re-issue rates apply, the discount can also apply if you’re purchasing a property with a recent policy.The Previous Policy Must Be from the Same Title Company
Not necessarily. Many title companies will honor an existing policy if it meets their criteria, regardless of who issued it.
Why It Matters
A re-issue rate can result in substantial cost savings on your title insurance premium, freeing up funds for other aspects of your home purchase or refinance. By understanding this option and asking the right questions, you can avoid paying unnecessary fees.
Final Thoughts
If you’re refinancing or buying a property that was recently insured, it pays to explore the re-issue rate for title insurance. Confirm the policy details and time frames with your title company or real estate attorney to ensure you’re eligible. With a little due diligence, you could save a significant amount on your title insurance premium while still enjoying the same core protections a new policy would provide.