Property owners purchasing real estate in Florida may be unsure as to whether or not they need to purchase title insurance. For those paying for the transaction in cash, no, they are not legally required to buy an owner’s policy. Since there is no lender involved in the transaction, they don’t need to purchase a lender’s title insurance policy either, but should they still protect themselves with title insurance? We strongly suggest yes.
Owner’s versus Lender’s Title Insurance Policies – What’s the Difference?
There are a few types of title insurance policies property owners can purchase. Owner’s and lender’s policies are the most common, but there is also a leaseholder’s policy that can be purchased. Here are the differences:
- An owner’s policy protects the interest of those purchasing the property.
- A leaseholder’s policy protects the interest of owners who rent their property with long-term leases, and
- A lender’s policy protects the interest of the lender issuing the loan to the buyer.
Nearly all lenders require the buyer to purchase a lender’s title insurance policy at closing. If they have skin in the game, they want to ensure they’re protected with a valid and enforceable lien on the property. But a lender’s policy only protects the lender, not the owner. Although not required, owners should strongly consider purchasing a separate owner’s title insurance policy to protect themselves. This is true whether you finance the purchase with a mortgage or pay for the property in cash. Here in Florida, who pays for title insurance can also be an area for negotiation in the sale.
Why You Need Title Insurance in Florida
Before closing on a new property, your title company will check the property’s title history, but even if it has a clear title, undiscovered “hidden hazards” can pop up years after you complete your purchase. Title insurance is a policy that protects you, as a homeowner, against these hidden hazards as well as against any third-party claims on your property, including liens and easements that were recorded in the public records prior to your closing. For example, if there is a legal claim against your house because the previous owners failed to pay their mortgage, the bank or debt collector could come after your house! – if you’re not protected with title insurance. Conversely, with title insurance, you will be protected from such actions for as long as you or your heirs own the home. This peace of mind is priceless, and although title insurance comes at a cost, it’s a tiny fraction of what you could stand to lose without it.
Contact Us with Questions About Title Insurance in Miami
Protecting your home with title insurance is a smart way to safeguard your investment, especially for the relatively minimal cost it takes to provide coverage. A one-time premium payment protects you for the duration of your ownership. If you have questions about title insurance or why you should consider purchasing it, please get in touch with our team at ADS Title Services. Our attorneys at the Law Offices of Alex D. Sirulnik, P.A. can help with all this and more. Please contact us today to request a free consultation.