Closing Protection Letters (CPL)

What is it?

A Closing Protection Letter (CPL) basically provides you additional protections and assurances against losses arising out of the negligent actions of the Title Insurance Company's authorized issuing title agent/title company, in connection with the closing of your real estate transaction. Key protections of a CPL includes the following:

• Loss due to fraud, theft, dishonesty, misappropriation of funds, or the mishandling of documents, and
• Loss due to failure to comply with the closing instructions of the lender as provided for by the terms of the CPL.

Colorado Title Insurance Regulation 8-1-3 allows title insurance companies (aka. title underwriters), at their option, the ability to issue a CPL to buyers, sellers borrowers and lenders. The American Land Title Association ("ALTA") the title industry's national trade organization has a promulgated CPL form that is typically used by the title insurance companies.

Regulation 8-1-3 requires that if a charge for a CPL is to be made, the cost must be filed with the Division of Insurance; however, a Title Insurance Company may issue a CPL at no charge. Additionally, Regulation 8-1-3 requires the Title Insurance Company to provide you with a disclosure statement within your title commitment, as to the availability of a CPL for your real estate transaction.

Do I need it?

It is highly recommended that you, whether as a buyer, seller, borrower and lender obtain a CPL for your real estate transaction when doing business with a title agent/ title company.

How do I get one?

Ask your real estate broker or mortgage lender, when they're recommending and ordering your title insurance and closing services, to request and obtain a CPL on your behalf; or just contact your selected Title Company directly.

Also, CompareTitleCompanies.com can assist when running a quote; as the detailed summary, will identify whether the Title Insurance Company will issue the appropriate CPL and for what charge, if any.