Title insurance. Have you heard of it?
Your title company is going to bring it up at a certain point if you are in the process of buying any piece of real estate. And, since title insurance is mandated in Florida, you have to purchase a policy at the closing.
To make the most of it when you need it, it is a good idea to get to know what title insurance is. Let’s take a closer look.
What is Title Insurance?
Title insurance protects you from a financial loss that could be caused by a defect in the property’s title.
Once you sign the initial contract to purchase the property, your title company will go to work diligently searching through all records pertaining to its history. They will make sure that the title is clear of any defects as well as confirming the seller has the authority to sell the property. That way, once you take title to the property, you can feel confident everything is clear.
A few title defects the examiners are looking for include:
- Judgments
- Liens
- Easements
- Encroachments
- Outstanding taxes
- Bankruptcies
Unfortunately, there are situations in which things can get missed during the title search. And they can appear at any time in the future – with you as the new owner and responsible party.
Title insurance helps to protect you in this instance.
Types of Title Insurance
There are two main types of title insurance – an owner’s title policy and a lender’s title policy.
An owner’s title insurance policy protects you as the new owner of the property. With one premium payment made at closing, this policy will remain in effect for as long as you or your heirs own the property.
A lender’s title insurance policy protects the lender only – not you. They are taking a risk in giving you the money for your purchase and want to make sure they are covered should something go wrong. As soon as your mortgage is satisfied, the lender’s policy is no longer valid.
How Does Title Insurance Work?
Now that you know what title insurance is, what do you do with it?
Some people have a title insurance policy they never have to use. In this case, that one premium payment that was paid at closing truly becomes a just-in-case payment. However, there are many others that find themselves grateful for the protection.
Moving into your home after closing can make you excited to step forward with your life plans for the future. Then, out of nowhere, you could receive news that puts your rights to your own property in jeopardy. This could be 6 weeks down the road, 6 months, 6 years, or even longer.
Maybe it is an unknown heir that didn’t make the title search or maybe the prior deed was forged or forced under duress. A large judgment or lien could have been recorded erroneously – and now the creditor is threatening to take action. There are so many title issues that can arise, so, what do you do?
With title insurance, you simply file a claim. That’s it. You don’t have to find yourself responsible for handling a legal battle or the hefty financial expense of fighting for your property rights.
Learn More About Title Insurance
If you have questions about title insurance or would like to know more, it helps to have an experienced title team on your side. At Kendall Title, we have extensive experience in handling title work – from contract to closing. So, if you’ve got questions, we have answers.
Contact us today at (904) 230-1063.
