When buying a home in Florida, securing title insurance is an important step in the closing process. If the buyer is financing the purchase, title insurance will be required by the lender. Without financing, title insurance is optional but universally advised.
Title insurance protects both buyers and lenders against potential issues that may arise with a property’s ownership history. Unlike other types of insurance that safeguard against future events, title insurance focuses on risks tied to the past, helping ensure that you’re receiving clear ownership of your new property.
The Importance of Title Insurance
There are two types of title insurance: one protects the lender (loan policy) and the other protects the buyer (owner’s policy). In Florida, all federally insured lenders will require a buyer to have at least a loan policy. Although an owner’s policy is not required to move ahead with the closing, having one is an added layer of protection against any issues with the title search. Title Insurance covers the following:
- Protection Against Title Defects: Title insurance covers a wide range of defects. These can include errors in public records, such as mistakes in deeds or clerical issues that could cloud ownership rights. It also protects against undisclosed liens: debts tied to the property from unpaid taxes, contractor bills, or even homeowners’ association fees. Without title insurance, you could unknowingly inherit these obligations.
- Fraud and Forgery: Forged signatures on deeds, fraudulent transfers, or false claims of ownership can surface years after you purchase your home. Title insurance provides coverage for these situations, protecting your legal right to own the property and covering the legal costs of defending your ownership in court.
- Unknown Heirs and Ownership Claims: If a previously unknown heir surfaces with a valid claim to the property after your purchase, title insurance shields you from losing your investment. Similarly, it protects against disputes stemming from improperly executed wills, trusts, or prior transfers.
- Survey and Boundary Issues: Depending on the type of policy you purchase, title insurance can cover losses related to survey errors or legal disputes over property lines. This is especially valuable in Florida, where land use can vary significantly between urban, suburban, and waterfront properties.
Title insurance in Florida covers much more than just paperwork errors. It’s a crucial layer of protection against financial loss, legal battles, and unforeseen claims to your property. By securing this coverage at closing, you can enjoy your new Florida home with confidence, knowing your ownership is protected.
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