What is Title Insurance and Why you (Probably) need it

Why you should purchase Title Insurance

Title Insurance is a form of insurance, like car insurance or health insurance. The goal of title insurance to insure a homeowner against any defects from the title in the property. We recommend purchasing title insurance to protect your property & equity in the property.

Is this Insurance Required?

Under Florida Law, title insurance is not required. Although if you are purchasing a property with a mortgage, then most lenders will require it. Thus, if you are purchasing a property with a loan, then you will most likely need it.
 
Title Insurance is not needed when purchasing a property with cash. Make sure you understand the ramifications for not obtaining title insurance. There are many reasons why a defect can arise in the title of a property, we therefore strongly suggest title insurance.

How do I get Title Insurance?

In the course of purchasing a property, talk with an experienced real estate attorney. They will be able to assist you with purchasing title insurance. The first step that an experienced real estate lawyer will take is to search the title of the property.
 
The title search ensures that the seller in fact does own the property. The search will seek to ensure no defects in the title exist. These defects include unknown liens, missing information in the property, etc.

What does this insurance do?

The second step in the process is to buy a policy. This insurance policy from an insurance company will pay to defend you in case a defect exists.
 
When purchasing a home without title insurance, your equity in the home would be at risk. Any defect that arises in the title puts the money you put into your home in jeopardy. Equity would include any funds from a downpayment to mortgage payments, etc.

What Policies Exist?

Two different policies exist 1) an owner’s policy and 2) a loan policy. The owner’s policy will protect the buyer from any defects that may arise. This policy will protect the owner and their heirs for as long as they own the property.
 
Whereas the lender’s policy will protect the lender from any defects in the title. This later policy will protect the lender for as long as a mortgage exists on the property.

How much does it cost?

In Florida, the buyer usually pays title insurance. The cost is not very much. The party responsible for paying the insurance will actually vary from the county. Often the seller will pay for the owner’s policy, & the buyer may pay for the lender’s insurance.

Contact an Experienced Real Estate Attorney

We always suggest consulting an experienced Real Estate Attorney when purchasing a home. Our firm has been helping clients buy properties for over 30 years. If you or a loved one is buying a property, call us for a free consultation. Contact us today at 772-589-5500 (Sebastian Office) or 772-774-7771 (Vero Beach Office). Click here to submit an online Free Case Evaluation.