difference between title search title report and title insurance in Florida

What Does Florida Title Insurance Best Protect Against?

Jan 25 2024

Each successful real estate transaction results in the transfer of title from seller to buyer. As the sum of all your rights to a property, including ownership, title should be protected just as much as the physical property itself.

That is why buyers should work with an experienced attorney-owned and operated title company to examine the title of their desired property and identify any claims to the property’s title (i.e., liens, encumbrances, judgments, etc.) that should be settled before closing. However, even the most diligent title examination can miss “title clouds” or “hidden hazards” that may reemerge years later and put your ownership at risk.

Ultimately, the only way to protect against unforeseen title issues is to purchase title insurance, which is best provided by experienced title professionals like the ones at Marina Title.

Owner’s Title Insurance vs. Lender’s Title Insurance – Understanding the Difference

First, it is important to distinguish between the two main types of title insurance: Lender’s title insurance and owner’s title insurance.

When a home buyer borrows money from a lender to buy a property, the lender will most likely require the owner to pay for a lender’s title insurance policy. It is crucial to note that a lender’s policy protects only the lender’s interests and covers only their liability. The lender’s title insurance specifically protects the lender’s interest in their mortgage lien on the property.

By contrast, an owner’s title insurance policy protects the owner’s title rights to the property and protects them from liability arising out of title issues that may impact the property. Although not mandatory, acquiring an owner’s title policy is essential to protect your interest in the property for as long as you own it.

What Does Title Insurance in Florida Best Protect Against? – An Overview

An effectively drafted title insurance policy will cover almost every hazard to your ownership and title interest in a property, including:

  • Incorrectly filed deeds in the chain of title (or mortgages);
  • Fraudulent or forged documents;
  • Fraudulent sellers;
  • Invalid powers of attorney in the chain of title;
  • Outstanding debts owed by previous property owners ;
  • Unknown heirs;
  • Property liens (e.g., liens for unpaid taxes);
  • Judgments attached to the property; and
  • Past mistakes in recording of the property’s legal documents.

Some matters that title insurance may not cover include zoning issues, boundary line disputes, and cases involving environmental protection laws. It is important to work with an experienced title expert to help you understand what matters title insurance does cover.

How Much Does a Title Insurance Policy Cost in Florida?

Unlike other types of insurance policies, title insurance is paid via a one-time premium. It is typically paid for at closing. Once the premium is paid, the insurance policy will remain effective for as long as the property remains in the name of the insured owner and his or her heirs.

Under Florida’s Administrative Code, title insurance rates are determined by the State of Florida based on a formula that the State has created. The rate is determined by the purchase price and the loan amount.

Discounts on title insurance are available if the seller has purchased the property less than three years ago and provides a copy of their policy, in certain situations for new home purchases, and when an owner is refinancing their property.

Generally, the total amount paid is less than one percent of the property’s purchase price paid at closing. Given the long-term benefits of title insurance, this investment is worth every penny.

Do You Want to Protect Your Property’s Title? – Work with Marina Title

A title insurance policy is only as good as the legal expert that drafts it. Given the complexities of conducting a title search, examining the title, and drafting a policy that can effectively protect it, such services are best provided by expert real estate and title attorneys.

Fortunately, Marina Title is attorney-owned and operated, and has handled thousands of successful real estate transactions across Florida. Our title company offers next-level title, escrow, and closing services for virtually all your real estate needs.

Do not expose your property’s title to unnecessary risk – get title insurance today. Contact us by calling (800) 604-1871 or email us at Info@MarinaTitle.com for a free closing cost estimate and consultation on the closing process in Florida. We provide title, escrow and closing services throughout the State of Florida.

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