Title Insurance

What Is Title Insurance?

Title insurance protects owners and lenders against losses resulting from title issues arising from events that occurred prior to the date of the policy but which were only discovered after the completion of the purchase transaction.

While title companies make thorough searches of the public record to identify liens, judgments or other “clouds” on the title prior to closing, there is always the risk that an encumbrance is missed and only comes to light after closing. Title insurance covers the cost of remedying such problems.

Lender’s Title Insurance?

Purchasing title insurance is only obligatory if there is a mortgage because all mortgage lenders require protection for the loan amount. The policy protects only the lender and the single, up-front premium is paid by the buyer.

What About The Buyer?

Because the lender’s policy doesn’t protect the owner, the buyer will need an owner’s title policy for the full value of the home. In Florida, although not a legal requirement, it is customary for sellers to pay for owner policies as part of their closing costs.

How Much Does It Cost?

Title insurance premiums are proportional to the value of the home. Prices vary from company to company but, as a guide, you should expect to pay around $1,600 for a title insurance policy on a $250,000 home, $2,100 on a $350,000 home, and so forth. These rates include the title company title search, examination and closing fees.