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Do I need Title Insurance and What is it for?

“Why do I need Title Insurance Anyway?”By Valinda Hanna-LazarusKeller Williams Port St LucieThe AM GroupAs a Realtor®, I get asked this question quite a bit by my customers. Depending on a home’s purchaseprice, title Insurance can add a big chunk to the bottom line of a closing statement.So, let’s start by understanding what title insurance is. Because every piece of property has a historyand story to tell, the owner’s title policy provides protection to the new buyer should any title problemsarise after the closing of the transaction. The owner’s title policy provides protection to the new ownersof the property, and the lender’s title insurance policy (typically issued for the mortgage amount)provides protection to the lender.While the lender’s policy is added to the buyers’ closings costs, the costs of the owner’s title policy canbe paid by either buyer or seller (in most counties) by negotiating it on the Florida Realtor’s® ResidentialContract. There are some counties where it is the buyer’s responsibility¹. For the state of Florida, theowner’s title insurance policy premiums are promulgated. This simply means the state has set forth anddetermined the rate based on a specific calculation, and as such the premiums will be the same nomatter what title company is used.Is the owner’s title insurance policy mandatory in Florida? There is no law requiring that you buy anowner’s title policy when you purchase real estate, however, I along with every other Florida Realtor®would tell you that it would be completely unwise and imprudent to not purchase title insurance.As I hinted before every piece of property has a history, and because mistakes can happen there is noabsolute guarantee that some error, problem or issue will not arise on the property you just purchased.Think of your owner’s title policy as a parachute just in case it does!Some possible title issues that can arise after closing include; liens placed due to prior owners’ formerdebts, an undiscovered will or missing heir, boundary disputes, fraud or identity theft of prior owner,illegal deeds and so much more.So, why do you need title insurance anyway? The purchase of a home is typically the largest investmentmost people will make in their lifetime. Protecting that investment with an owner’s title policy is just apragmatic, wise and financially sound thing to do!1. Check with your local Realtor® in the county you are purchasing property to determine who is responsible.

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