Briefly, the 2000 law states that:
* The Florida Department of Insurance must state insurance premium rates for title insurance, which is separate from settlement and closing rates.
* Unlawful rebates from the title insurance company or agent are prohibited.
* Thirty percent of the risk premium is guaranteed to the title insurance underwriter to cover title services with the remaining 70% open for rebate negotiation.
Although the State of Florida has anti-rebate statutes, the Butler rebate effectively places an exception allowing any Florida title company to offer to return a portion of the premium paid for title insurance (Sec. 627.7711(b) Fla. Stat).The courts allowed for this exception because it is part of the insurance company’s performance and core title services.
Our policy on the Florida Butler rebate is unlike that at other insurance companies because we offer upfront “Butler rights” instead of waiting for you to ask about it. However, as mandated by law, the Butler rebate is not a discount on the premium. You will find the rebate rate on the closing statement and the premium must be paid upon formal signing of the title insurance policy. Furthermore, this rebate cannot be shared with anyone else but the paying party and persons who assist in the title insurance contract issuance regardless if it is a commercial or residential property.
FLORIDA BUTLER REBATE
When a Florida developer, S. Clark Butler, challenged his insurance agent for refusing to negotiate insurance premiums, it ended up as a landmark case that went all the way to the Florida Supreme Court.
The result of the case is a “right to freely bargain,” which means that Florida buyers, property owners, and lenders now have the right to try to negotiate insurance premium rates with their insurance company. This case also gave rise to the pioneering Florida Butler rebate, which gives Florida title insurance agents the option to offer the paying party rebates on a percentage of the insurance premium.
There are no “ifs,” “ands,” or “buts” about title insurance. Whether you are the property owner, buyer, or financer of a property buyer, title insurance protects your interests and prevents you from investing in a property that isn’t marketable or clear of liens or encumbrances.
The Florida Butler Rebate applies when signing the closing statement. Since Florida property owners historically pay more than in most other states, the Butler rebate clearly takes on a significant role in cutting costs. You cannot be coerced into using the services of your realtor, affiliated insurance company, or lender. Title insurance is a necessary cost, but you have direct control over it because of the Butler rebate.
Law Office of Matthew G. Lerner, P.A.