Should You Buy Owner's Title Insurance for Florida Homes?
Owner's title insurance is offered to all home buyers. It is an optional coverage with a one-time premium, usually paid at closing. If you are wondering whether you should buy title insurance for Florida homes, this information may help you decide.
What Is Owner's Title Insurance
Owner's title insurance protects you against any title issues (others claiming ownership or rights to a property) that may arise during your ownership period. This is different from lender's title insurance, which is normally mandatory if you are using a mortgage to purchase a home. Lender's title insurance protects the lender's interest in the property. Owner's title insurance protects your interests (and equity). Your policy covers a specific dollar amount (essentially your purchase price) and remains in effect for your entire length of ownership. There is no need to purchase additional policies even if you refinance or change mortgage companies, that is unless the owners names have changed.
Examples of Title Issues
Here are some examples common title issues:
- Property Line/Boundary Disputes
- Errors in Publicly Recorded Documents
- Missing or Previously Unknown Heirs
- Unknown/Undisclosed Liens on the Property
- Illegal Deeds (i.e. by unauthorized or illegal parties)
- Forged Documents or Impersonations
Does Title Insurance Cover Every Possible Issue?
Unfortunately, title insurance for Florida homes does not cover every possible title issue that may arise. For instance, most policies will not cover new problems created after issuance of the policy. They only cover past issues that you as a home buyer were not aware of when purchasing the home. This includes zoning violations, tax assessments, or your failure to pay your mortgage. There are also some pre-existing issues that may not be covered. Review your title insurance policy for more details on coverage and exclusions.
What Happens If a Title Issue Arises?
Title issues range from minor to major. If you have a title insurance policy that covers a particular issue, the title company and its representatives will work to correct or resolve the matter. If you do not have a policy, you would need to personally take corrective action. This may include tracking down old lenders or owners, filing certain paperwork, attending court proceedings, and paying attorneys' fees.
More Information on Title Insurance for Florida Homes
There are many providers of title insurance for Florida homes. The best way to obtain detailed information on policies is to contact the title insurance companies directly. If you decide not to purchase owner's title insurance at closing, it may still be possible to purchase one within a certain number of days after closing. Learn more about what is and is not covered so that you can make an educated decision on whether to purchase owner's title insurance for your Florida home purchase.