What Protection Does Title Insurance Provide?

Typically, purchasing real estate is a big investment. Whether you are purchasing real estate for yourself or as an investment property, you want to make sure that your investment stands on solid financial ground. Our experienced Florida real estateattorneys can help provide you with peace of mind that your investment is secure by working with you in all aspects of a real estate purchase, including helping you understand title insurance.

What is Title Insurance?

If you are purchasing real estate, you are likely purchasing it from someone who is re-selling it. You may not be the first person to conduct a real estate transaction with that property. In fact, the title to the property you are purchasing has likely changed hands many times. The land the property is located on may have changed hands even more times. All too often, small details in title transfers can be overlooked. When this happens, it causes a potential problem in the validity of the title to that property. At some point, liens could have been overlooked, or signatures could have been forged. Any mistakes along the way can easily come back to haunt you even if your purchase of the property was otherwise completely legal and performed correctly.

Title insurance helps insure the value of your title in case one of these errors jeopardizes your property. Unlike traditional property insurance, title insurance protects against mistakes in the past. If you need to apply for a mortgage to complete your real estate purchase, you will need to purchase title insurance for the mortgage lender as well in order to protect the lender in the case of loss due to a defect in the property’s title. This is known as a lender’s title insurance policy because it solely protects the lender, as opposed to an owner’s title insurance policy, which is secured to protect the interests of the new owner. Typically, a lender’s title insurance only covers the lender for up to the amount of the mortgage loan. An owner’s title insurance typically covers losses up to the amount of the purchase price. The Florida Department of Insurance regulates title insurance premiums so the cost of such will be relatively uniform depending on the value of the property you are purchasing and the mortgage amount.

Do You Need Title Insurance?

Usually, this will only be issued once a complete title search has been performed. However, title searches always come with the potential for error on multiple levels. Counties may misplace records, transactions may have occurred without being properly recorded, or unsavory family members could have forged signatures during a real estate transaction that is not discovered until years later. That is why it is advisable to purchase title insurance even if you are purchasing a home outright without the need for a mortgage. Typically, the cost for purchasing this extra coverage is relatively minimal, especially when compared to the prospect of how much you could lose without such a policy in place.

Our real estate attorneys at Jurado & Farshchian have a great deal of experience working with clients at all stages of the real estate purchase process, both residential and commercial. We can help you understand the role that title insurance plays in your real estate transaction and work with you through the myriad of other steps involved when making such an important purchase. Our experienced Florida real estate agents will help you select the right policy based on the assets you want to protect. To find out more about how title insurance can help protect your real estate investment portfolio, contact our experienced real estate attorneys and title agents by emailing [email protected] or by calling 305-921-0440

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