Does title insurance protect my foreclosure purchase

[Ayinde Dick]

I I recently won a foreclosure auction conducted by the city of Jacksonville in Florida. I purchased title insurance along with a homeowners insurance policy immediately following the sale. I waited the 10 days redemption period and contacted the city only to find out that title would not be issued in my name. 3 days before the auction the defendant filed for bankruptcy which means the auction should never have taken place. I contacted the city for a refund of my $85,000 cash and was told my funds couldn't be released until a judge made a final decision on this bankruptcy. Should my title or homeowners insurance cover my financial loss? If one of these insurance policies covers me will it cover the amount that I paid or the actual value of the home?

[Wayne Brooks]

No......but, you have no loss here.   This happens occasionally, a defendant files BK, the court is not informed or simply fails to delay the auction. 90% chance the sale was not supposed to occur, you get refunded your money.  10% chance the court validates the sale, you get the property.....you come out whole either way  

A side note....if you thought homeowner’s insurance could possibly cover the loss, if there was one, you simply don’t understand how insurance works.....which makes me wonder if you know all the risks with foreclosures, which is Much more complicated.

It’s good that you bought title insurance after the sale......but much more important to do a title search Before bidding, as if there is a title problem, you can Not buy title insurance after.