The title insurer, the party who provides the service to protect you, Florida’s title insurance premium is also determined based on the purchase price as follows: Purchase Prices up to $100,000: $5.75 per thousand. Purchase Prices Over $100,000: $5.00 per thousand.
Title insurance covers you for damage to your title as a result of an error or omission in the title search, and also provides indemnity (coverage) against losses which may occur as a result of such errors or omissions. It is not insurance against defects that existed before you took ownership — those are usually covered by a “warranty deed.”
If you decide not to spend the money on title insurance, be aware that there is no other form of protection against such problems as undisclosed back taxes or judgment claims. You will also lose the right to any claim for loss due to fraud by a previous owner.
Title insurance is an investment in your peace of mind and future. Let us help you obtain that peace of mind.
Title insurance can be issued in one of four ways:
1. The court system may require you to purchase your title insurance from a specific company, usually the local county court appointed Abstract Company at the time of Settlement, before funds are released to the seller’s attorney.
2. Some lenders require you to purchase your title insurance from them – usually they will sell it to you for a few dollars more than the cost of their abstracting and closing costs. This is called lender-placed insurance and can be very expensive and should always be compared before settlement with an independent title company’s policy, as it often provides less protection at a higher price.
3. You may decide to purchase a “full service” policy from an independent title company which provides you with the broadest coverage available and is backed by a major title insurer, such as First American Real Estate Solutions or Fidelity National Title Group .
4. If your agent suggests you purchase carry back (owner-placed) title insurance, we strongly recommend that you ask to see the policy before you accept it and discuss your options with us.
Title insurance is a legal contract with an insurance company where the title insurer insures against financial loss due to defects in the insured’s title.
A related service provided by the same insurer is known as escrow or closing services, which are actually two separate contracts
The insured has a contractual right to rely on the insurer’s opinion of the validity and sufficiency of all matters which might affect title. The policy typically covers matters such as unpaid mortgages, zoning ordinances, liens for special taxes or assessments against the property not yet due or delinquent, easements and restrictions that affect the land, clearing or settlement of boundary lines, covenants or conditions that encumber title, defective or hazardous waste on the property.
Title insurance is typically used when a person must have assurance of sound title in order to obtain financing for a transaction. It can also be used as an alternative to bankruptcy protection if creditors are threatening to foreclose on a person’s home or other property. In many instances, the cost of title insurance is less than the cost of defending against such foreclosure actions and their accompanying costs and anxiety.
Title insurance does not usually protect individuals who might be at risk of losing his or her property for reasons which do not involve financial loss. For example, if a person has fallen behind on his or her taxes and the government seizes the property, this will not be covered under a policy. Also, if there is no potential for loss of financial benefits such as a right to sell or use the property, there would also be no protection.
The insured must have a “conveyance” in order to be able to obtain title insurance. A conveyance is a legal document that transfers ownership of property. If the insured does not have a conveyance, the insurer cannot insure the title because it does not yet exist.
The exceptions are policies covering encumbered properties – i.e., where there is an outstanding mortgage on the property or where easements, rights of way, or leases (other than ground leases of 20 years or less) limit use of the property. There are also policies covering the legal fees for obtaining an unencumbered title.
Most states require sellers to disclose any material defects in title they know about, but not defects that they do not know about except when it would be reasonable to do so. Also, in most states, buyers are allowed to waive the inspections of the property and simply rely upon certain representations made by the seller in order to get title insurance.
Title insurance is purchased for a specific defined area and term of time – typically $100,000 of coverage for 1 year. The policy can be extended or renewed as the insured desires. The insured can go to any title insurer for a policy.
Some states require that sellers provide their own insurance, but this is very rare and usually only required where there are defects in the chain of title (i.e., problems or liens back through time that affect current ownership). In these cases, many buyers will obtain a rider to the seller’s policy providing additional coverage.
The insured should always carefully check all papers and all signatures at the time of closing, as well as verifying payments for special taxes or assessments which have been made against their property. Failure to do so could avoid any claim for title insurance coverage. However, there are some cases where the insured will still be able to pursue a claim even though the title insurance company has disclaimed coverage.
All states require that buyers purchase title insurance (or accept substitute protection such as a bond). However, some states do not allow for any other type of protection in lieu of title insurance. Other states provide for what is called “supplementary” protection in lieu of title insurance. This means that if buyers cannot obtain a policy, they can purchase some other form of protection in its place.
There are several different types of title insurance policies available when purchasing real property.
The most common coverage is for clouded or defective title when there is no reason to believe that the owner does not own legal title to the property.
When buying a home, the buyer takes out a separate policy for each individual lot or parcel of land being bought without any priority as to which policy covers which lots. The premium is based upon the total purchase price of all lots under one policy.
In contrast, when acquiring an office building or shopping center that contains multiple lots or parcels of land, buyers have the option of either taking out a policy on each individual lot in the same priority that they would for a single-lot property or combining all lots under one blanket policy. If buyers choose to take out a blanket policy, this must be done in the same priority as their other policies – i.e., it must be first or second priority.
In those states where the insured takes out a blanket policy on all lots, if any lots are sold during the term of insurance, this would trigger a refiling of the policy to include that lot as an additional insured on the policy with no need to take out a new or additional title insurance policy.
Who is responsible to pay for title insurance in title insurance in Florida?
The title insurance system in place in Florida provides security for property owners and lenders by offering protection against various claims arising from defects in the chain of title to real property, or other interests therein.
The insured party under a policy of title insurance is the owner of a fee simple absolute in possession estate, or a lessee under a lease for a term commencing at an absolute future time.
In order to be eligible for Title Insurance coverage, the applicant must have clear and marketable title-meaning that there are no existing claims against the property which would affect the title.
Title Insurance provides coverage for past and future claims up to the time of the issuance of the policy, including those resulting from defects which were created before coverage begins under a policy. Title insurance protects you from the risk that a previous owner or someone else might have claims on your property. It’s paid by whoever is buying or refinancing a home. If there are no issues, you will get the money back when the policy ends. In some cases, your lender may require you to buy title insurance.
Title insurance is a form of indemnity or guaranty against any defects varying from lien, encumbrance and unmarketability. In Florida, title companies charge their own amount for this service. The lender pays for it because he takes the risk on making sure that his investment (mortgage) is secured.