AfBA title insurnace can provide large savings to consumers

BrokerIPTV: Welcome to Broker IPTV. We are with John Clikeman and John Clikeman is with Meridian Title and Escrow and welcome John.

John Clikeman: Thank you.

BrokerIPTV: I was wondering... I would like to talk a little bit today about perhaps the benefits to the consumer that come about from the fact that AfBAs can shop around who they work with as far as underwritings.

John Clikeman: Well, basically in our philosophy of running AfBAs as we work with multiple underwriters to effectively give the consumer a choice as to rates, we are bound by rates filed by underwriters with the Division of Insurance and our philosophy is to hopefully do the best job for the consumer as we shop those rates and we definitely look for what we call reissue rates to come into play for the benefit of the consumer. A reissue rate in effect gives a consumer in our case of 50% discount on the title premium and that can be a very significant difference in a transaction where the normal title premium would be $1500; if it comes within the purview of a reissue rate with one of our underwriters, then that title premium becomes $750.

BrokerIPTV: So, you are saying working with an AfBA, affiliated business arrangement, has the ability to use one, two, three, could even have five underwriters and shop for the best rate given that consumer's particular situation at the given time.

John Clikeman: That's true. That's true. Actually, each one of the underwriters we work with have a different method of calculating their reissue rates. So, we do look at that when the order comes in to make sure if they come in compliance with the criteria of an underwriter that gives them the best rate. That's what we give them.

BrokerIPTV: So, I think there is a lot of consumers and real estate brokers I find frankly that are totally oblivious to this reissue rate, to the fact that although the rates are published with the Department of Insurance here, they are quite different and mostly in the aspects of the reissue rate. So, could you define just one more time what is a reissue rate?

John Clikeman: Reissue rate is basically a... you can call it a short term rate, the normal term is reissue rate, but it is usually based upon a time period of anywhere from three up to ten years with our underwriters wherein a credit is given against the title premium because of the fact that there has been a recent transaction and therefore underwriting criteria allow for a reduced rate. Our best rate goes back 10 years with Meridian Title and that's a significant savings for a lot of consumers.

BrokerIPTV: So, I think another question probably consumers and real estate brokers are going to ask in regards to reissue rates on Colorado title insurance is are they receiving any less of a policy or something is being left out? Are they not getting service? Is it different paper? What's the difference between a 10 year reissue and a one year policy full rate?

John Clikeman: As far as any of those items, there is no difference. It is the same title policy. It would be the same endorsements. There is I think... from our standpoint the philosophy is if they are entitled to a reissue rate, we are definitely going to give it to them as a benefit because we are... quite frankly we are very aware that one of the aspects that the Division of Insurance looks at is how is the consumer being affected, is it a positive way, it is a negative way and our philosophy is if we go in and make sure they are getting that best rate then we hope the Division of Insurance would appreciate that.

BrokerIPTV: So, it probably does pay for real estate brokers or consumers to really look at and shop for title insurance company.

John Clikeman: Yes. Definitely.

BrokerIPTV: Great. Well, once again John, keen insight, great answers and looking forward to talking to you next time.

John Clikeman: Good.

Posted on October 14, 2008 06:17:00 by Blog Author