A Guide To Understanding Title Insurance In Southwest Florida

What is Title Insurance?

It’s is a type of insurance policy that protects buyers and lenders from incurring losses in case there is an existing defect in the land title that could result in future claims against ownership. The policy amount depends on the market value of the real estate at the time the policy is purchased.

Do You Need Title Insurance in Southwest Florida?

While home-ownership is one of the critical steps in building long-term wealth, it is also one of the most significant investments that anyone can make. Most homeowners insure their property against other risks such as fire and theft while disregarding title insurance. While these risks could equally result in a financial nightmare, defects in the land title could result in you completely losing your real estate property.

Common title defects include but not limited to;

• Document forgery
• Undisclosed liens
• Invalid divorces
• Public record errors
• Boundary disputes
• Owner impersonation
• Unpaid taxes

A title insurance agent conducts a title search to ensure the title is clear of such defects before signing you to a policy. Even with the most thorough searches, one may still miss some errors. Title insurance protects buyers and lenders against financial losses incurred due to a contested title and reimburses them up to the amount stated in the policy in case of such occurrences.

How Much Does Title Insurance Cost in Southwest Florida?

The State of Florida has predetermined title insurance premiums as stipulated in Florida Administrative Code Chapter 690-186. Generally, the higher the market value of the property, the higher the title insurance premium. In addition to the premium, there are the agent fees that vary among different insurance agents. The agent fees may be negotiable. Unlike other insurance premiums, the title insurance premium is a one-time payment that ensures your property is covered so long you or your heirs retain an interest property.

However, a title insurance policy is not transferable. The policy terminates once the ownership of the property changes.

Types of Title Insurance Policy

There are two types of title insurance policies in Southwest Florida.

• • Owners policy. This policy covers the owner against specific claims, as stated in the policy agreement.
  • Lender’s policy. This policy covers the lender against losses for money loaned to the homeowner to acquire the property. A lender could be an individual or a financial institution.

Closing

It is also known as a settlement. Once the transaction is complete, there is a transfer of title from the buyer to the seller. Closing may take place anywhere as long as all the parties to the transaction are present. Here, other costs, such as the agent fees or attorney fees, are cleared as agreed by the parties. Once all the legal requirements have been satisfied, and the title transfer has taken place, the title insurance policy is delivered.

Real estate in Southwest Florida is vast. Therefore, title defects can easily slip through, even with the most diligent title searches. Title insurance does not prevent future claims against any real estate property; it ensures the owner or lender gets reimbursed for losses incurred due to such claims. Purchasing title insurance policy from the right agent guarantees buyers and sellers peace of mind by safeguarding their interests in the given property. A buyer should conduct a thorough background check before settling on a specific agent.