What is title?
Title to a piece of property is evidence of ownership of real estate. Having “title” to a property in Florida means you have the legal right to possess that property and to use it subject to the limitations imposed by various authorities.
What is title insurance?
Title insurance protects real estate owners and lenders against loss or damage they might suffer because of liens, claims, encumbrances, defects in the title or judgments associated with a property after a purchase is completed. Every title insurance policy is subject to specific terms, conditions and exclusions. Title insurance protects you from events that occurred prior to your ownership of the property. The insurer will defend your title in the courts, correct or clear the title when possible, pay you for your loss in the event of an unsuccessful defense of your title.
How is title insurance different than other insurance?
Most insurance policies (homeowners, hazard, auto, life, health, etc) cover you for events that may occur in the future. A title insurance policy protects you from events that occurred in the past. Title insurance starts at your closing but goes backwards in time, instead of forward like other insurance policies. It protects you from events that occurred prior to your ownership of the property.
Most insurance policies must be continually paid for to remain in force, so you make monthly or annual payments to keep them active. Your title insurance policy is paid for once, at your closing, and remains in force for as long as you have title to the property, with no additional payments required to keep the policy active.
What does title insurance cover?
Title insurance protects against a variety of defects, including another person claiming an ownership interest in the property, improperly recorded documents, fraud, forgery, encroachments, easements, unsatisfied liens and judgments, and other items. Each policy is subject to specific terms, conditions and exclusions.
Who needs title insurance?
Everyone should have a title policy on every property they own to protect them from events that occurred before they owned the property. Lenders usually require a title insurance policy covering their interest in the property, so if you getting a loan to buy a property, you will need a title insurance policy for your lender, but that will cover the lender’s interest and not yours. You will need a policy of your own to cover your interest. Again, everyone should have a title policy on every property they own.
How much title insurance should I get?
You should get title insurance equal to the purchase price of the property.
What are the types of title insurance policies are available?
There are two types of title insurance policies, an Owner’s Policy and a Lender’s Policy. The Owner’s Policy protects the owner’s interest. The Lender’s Policy only protects the lender’s interest. If you are buying a property with a loan, you will be required to get a Lender’s Policy but you should also get an Owner’s Policy at the same time. The additional cost is minimal and you will then be fully protected. If you are refinancing, you will be required to get a Lender’s Policy, but your original Owner’s Policy will remain in force for your protection.