We’ll cut right to the chase – no, title insurance is not legally required when buying a home in Florida, but it is highly, highly recommended. Here’s why:
Why You Need Title Insurance
Prior to 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 as a result of the previous owners failing 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.
Also, and generally speaking, no lender will give you a loan without obtaining title insurance coverage, and essentially, nobody In the United States is willing to run the risk to make the significant Investment of buying a property, without obtaining their own title insurance coverage.
How Much Does Title Insurance Cost?
In Florida, title insurance rates are set by the Florida Administrative Code. Rule 69O-186.003 specifies rates for all types of title insurance scenarios, including original owner and leaseholder title insurance coverage, reissue rates (if a prior owner’s policy exists), substitution loan rates, and other situations.
Unlike other types of insurance, title insurance comes with just a one-time premium payment, payable at the time of closing.
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 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.