Along with the excitement of purchasing a new home, comes the important steps involved in the real estate transaction itself. One crucial part of the process that buyers often overlook is title insurance; what it covers, why it’s needed, and why you should be happy you have it. Title insurance protects homebuyers and lenders from potential legal issues related to the property’s ownership history. It’s required by lenders that are financing your purchase, and it provides peace of mind to you, the new buyer.
But what exactly does Florida title insurance cover, and why is it so important?
Title Insurance Equals Protection
First, title insurance ensures that the seller has a legal right to transfer ownership of the property. It protects against problems like undisclosed liens, unpaid property taxes, and errors in public records that could affect the buyer’s ownership rights. Without this coverage, buyers could face expensive legal battles to defend their property claim.
Second, title insurance is a policy against loss that results from any claims against the property. It covers issues like forgery, fraud, false affidavits, undisclosed or missing heirs, unrecorded contracts of sale, bankruptcies in other jurisdictions, suppressed or undiscovered wills, power of attorney revoked by death or insanity, claims arising by reason of foreign divorces, erroneous interpretations of statues and rules of law, unrecorded easements, false impersonations, insanity and incompetence, and perjury. This protection helps safeguard buyers from unexpected challenges that may arise long after the purchase.
Additionally, title insurance protects against unknown heirs who might claim ownership of the property. In some cases, long-lost relatives of previous owners could emerge with a legitimate ownership claim. Without title insurance, buyers could face costly legal disputes trying to retain their property.
Additional Title Insurance Facts:
- If a claim is made against your property, your title insurance policy will provide you with a legal defense and cover the homeowner for any valid claims up to the amount of the policy (which is usually the purchase price or full loan amount).
- The cost of title insurance can vary based on factors such as the property’s purchase price and the title insurance provider. Title insurance premiums are typically a one-time fee paid at the closing of the real estate transaction. The premium is based on the property’s value, and it covers the policyholder for as long as they own the property.
- Title insurance is required by all lenders in a financed transaction. Although title insurance is not mandatory in a cash transaction, it is highly recommended.
Real estate transactions are complex. In our experience, the peace of mind and security provided by title insurance is invaluable. If you are purchasing property in the state of Florida and want to learn more about title insurance or any other aspects of the closing process, contact us today.
The Law Office of Donna Hearne-Gousse
(561) 582-5670