Title Insurance Services

What Is Title Insurance?

Title Insurance is a form of indemnity insurance, which protects owners and mortgage lenders against financial loss resulting from challenges or defects in the title to real estate. Prior to the transfer of ownership, a satisfactory title examination is required to issue the policy. These policies protect a policyholder against loss from some occurrence that has already happened but is not shown in the public record, such as a forged deed somewhere back in the chain of title. Title insurance will typically cover the policyholder’s attorney and court expenses, or pay for financial loss caused by unknown defects, subject to the policy’s terms and limitations.

Title insurance is the only insurance that protects purchasers and owners against loss due to an unforeseen title defect.

Lenders require mortgage title insurance as a condition for obtaining a loan whenever you purchase or refinance real estate.

 

A lender’s title insurance policy protects the lending company against a financial loss or expense incurred due to issues related to title.

How Does Title Insurance Differ From Other Types Of Insurance?

Title insurance insures loss from past events, while other types of insurance cover loss from future events.

When first buying real estate, we recommend purchasing an owner’s title insurance policy. Title insurance is a one-time purchase, not a recurring expense like automobile or homeowner’s insurance.

How Do I Find Out About The Title Of My House?

As part of our settlement service, American Guardian Title order a thorough title search that results in a detailed history of the property based on recorded documents such as deeds, liens, and judgments maintained and indexed at the courthouse in the jurisdiction where the property is located. Occasionally, however, the system used by a courthouse for indexing and recording documents related to real property can be subject to flaws and inconsistencies, and the title company’s investigation may not discover them.

What Are The Most Common Title Defects?

Typically, defects that can appear on a property’s title are a matter of public record, such as unreleased mortgage liens, medical and utility judgments, and mechanics liens. Other defects that can cause a more substantial loss of your investment, and lead to higher legal fees are more dangerous and often hidden. The following examples are not common, but do occasionally occur:

  • Forged deeds, releases, wills or other legal documents

  • Failure of spouses to join in conveyances

  • Undisclosed or missing heirs

  • Deeds from minors, illegal aliens or persons of unsound mind

  • Errors in indexing public records

  • Liens for unpaid taxes including estate, inheritance, income or gift taxes

  • Mistakes in recording legal documents

  • Deeds from defunct companies, corporations

  • Unprobated wills

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How Does Title Insurance Protect A Property Against Hidden Title Defects?

There are two types of title insurance policies available to consumers at the time of settlement.

“Standard Policy” is based on the sales price of the home at the time of closing, and does not escalate in value with the home’s appreciation over time.

An “Enhanced Policy” does offer an escalation as the value of a home appreciates. Under an enhanced policy, the homeowner may be able to recover up to 150 percent of the original purchase price.

Frequently Asked Questions

Is title insurance required to purchase a property? 

It depends. A buyer is not required to purchase an owner’s title insurance policy, but it is highly recommended. However, for those taking out a mortgage, the lender may make purchasing a lender’s title insurance policy a condition of the loan. This means in order for the settlement to be successful, you will have to purchase a lender’s policy. 

How much does title insurance cost? 

Florida’s State Department of Financial Services sets the rate for title insurance throughout the state. But the cost itself will be dependent on the purchase price. Here’s a breakdown of the current cost: $5.75 per $1,000 up to $100,000, then $5.00 per $1000.

Is the title insurance fee the same as the search and closing fee? 

No, the title insurance fee is in addition to the search and closing fee. The cost of the latter is set by the title company. 

Who pays for title insurance? 

In Florida, each county has different standards for who is responsible for purchasing the title insurance policy. It is quite common for the seller to be the one to make the purchase, though this can often be negotiated. 

How long does a lender’s title insurance policy last? 

A lender’s title insurance policy lasts until the mortgage is satisfied. It is purchased based on the value of the loan, but as you make your monthly mortgage payments, the loan and its value decrease, and so will the coverage of the insurance. Once it is paid and satisfied, there is nothing else for the title insurance to protect. 

Will a lender’s title insurance policy protect the owner too?

No. As its name suggests, the lender’s title insurance policy only protects the lender. For the owner to have protection from title insurance, an owner’s policy will need to be purchased.

Will my owner’s title insurance run out? 

Your owner’s title insurance policy will offer you protection for as long as you - or your heirs - have an interest in the property. 

Do I need to purchase a new title insurance policy when refinancing? 

Yes and no. Because you still have an interest in the property, you do not need to purchase a new owner’s title insurance policy. But, since your refinance means closing out the old mortgage and adding a new one, you will need a new lender’s policy. The previous one you purchased was tied to your old loan. Once that gets satisfied, the title policy is no longer valid.