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The "Optional" Myth about Title Insurance

Mon, Apr 27, 2015 at 2:55PM

When you buy a home, you want it to be yours. 

Title insurance helps keep it that way.

You may think a problem with your title is a remote possibility, but one out of every four title searches exposes an issue.

There are many problems that could affect your title, including tax liens, forged signatures in the chain of title, recording errors, title search errors and claims by missing heirs and/or an ex-spouse.

In a nutshell, your title insurance policy protects from future loss if a covered claim against your property is made.

There are two types of title insurance.
Loan Policy protects the lender for the amount of the loan. If you only have a loan policy, you are not protected if a problem materializes with your title.

An Owner’s Policy protects you and your property – your equity.
Additionally, the Owner’s Policy provides assurance that your title company will stand behind you if a covered title problem arises after you buy a home.

Unlike most insurance policies, title insurance is a one-time-only fee. An Owner’s Policy will protect you as long as you and your heirs have an interest in the property.

It Can Happen
A recent news article tells of a homebuyer who purchased a home on a land contract and made monthly payments of $1500 until they were able to secure a loan from a national lender. At the time, the lender required the buyer to purchase a Loan Policy. Because it is not required by law to purchase an Owner’s Policy, the homebuyer closed on the home without Owner’s coverage. Only the lender’s interest was being protected by the loan policy.

Several years later, the owners of the home were notified that their house was now being foreclosed on and the sale date was fast approaching. How could this have happened? As it turns out, there was a prior loan on the home that was never paid off by the previous owner. Because the current lender had required a Loan Policy, their interest in the property was covered. Had the current owners invested in an Owner’s Policy, they would have been protected. Unfortunately, without title insurance, they lost their home. Additionally, the resulting foreclosure may adversely affect their credit standing for years to come.

The cost of title insurance depends on the value of your property. In Florida, title insurance rates are promulgated by the Office of Insurance Regulation (OIR). To get a quote for your home, click on our rate calculator here.

For more information on title insurance, contact your nearest Southern Title office at 866-297-5535.

When you buy a home, you want it to be yours. 

Title insurance helps keep it that way.

You may think a problem with your title is a remote possibility, but one out of every four title searches exposes an issue.

There are many problems that could affect your title, including tax liens, forged signatures in the chain of title, recording errors, title search errors and claims by missing heirs and/or an ex-spouse.

In a nutshell, your title insurance policy protects from future loss if a covered claim against your property is made.

There are two types of title insurance.
Loan Policy protects the lender for the amount of the loan. If you only have a loan policy, you are not protected if a problem materializes with your title.

An Owner’s Policy protects you and your property – your equity.
Additionally, the Owner’s Policy provides assurance that your title company will stand behind you if a covered title problem arises after you buy a home.

Unlike most insurance policies, title insurance is a one-time-only fee. An Owner’s Policy will protect you as long as you and your heirs have an interest in the property.

It Can Happen
A recent news article tells of a homebuyer who purchased a home on a land contract and made monthly payments of $1500 until they were able to secure a loan from a national lender. At the time, the lender required the buyer to purchase a Loan Policy. Because it is not required by law to purchase an Owner’s Policy, the homebuyer closed on the home without Owner’s coverage. Only the lender’s interest was being protected by the loan policy.

Several years later, the owners of the home were notified that their house was now being foreclosed on and the sale date was fast approaching. How could this have happened? As it turns out, there was a prior loan on the home that was never paid off by the previous owner. Because the current lender had required a Loan Policy, their interest in the property was covered. Had the current owners invested in an Owner’s Policy, they would have been protected. Unfortunately, without title insurance, they lost their home. Additionally, the resulting foreclosure may adversely affect their credit standing for years to come.

The cost of title insurance depends on the value of your property. In Florida, title insurance rates are promulgated by the Office of Insurance Regulation (OIR). To get a quote for your home, click on our rate calculator here.

For more information on title insurance, contact your nearest Southern Title office at 866-297-5535.


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