Title insurance protects buyers and lenders from financial loss caused by defects in a property's title. Covered defects can include unpaid taxes or liens, forged documents, undisclosed heirs, and recording errors that a title search did not catch. Without title insurance, an undiscovered title problem could lead to a lawsuit or loss of the property, with no one to pay for it.
How It Works
There are two kinds of policies. A lender's policy protects the mortgage lender and is usually required for a loan. An owner's policy protects the buyer. If a covered claim arises, the insurer pays for the legal defense and pays valid losses up to the policy amount. Unlike most insurance, title insurance covers problems from the past, not future events. The premium is paid once at closing, and owner's coverage generally lasts as long as the owner or the owner's heirs hold the property.
What It Costs in Florida
Florida sets title insurance premiums by rule, so the base premium is the same with every insurer. For an owner's policy, the rate is $5.75 per $1,000 of the purchase price up to $100,000, and $5.00 per $1,000 from $100,000 to $1 million. On a $300,000 home, the premium is about $1,575. When a lender's policy is issued at the same time, it costs much less. Endorsements and search fees are extra. Whether the buyer or seller pays for the owner's policy is negotiable and varies by county.
Major Title Insurers
The largest title insurance groups in the United States are Fidelity National Financial, which includes Fidelity National Title and Chicago Title, First American, Old Republic, and Stewart. Together they write most title premiums.
Title Insurance and the Deed
Title insurance is separate from the deed. A warranty deed gives the buyer a claim against the seller, while title insurance gives the buyer a claim against an insurer. A title search comes before the policy, and Easler Law PLLC explains why title searches matter for sellers, buyers, and people who transfer deeds to related parties.