We get it. Buying title insurance isn’t the most pressing concern when house hunting. Some buyers don’t know what title insurance is, that it’s required by your lender, or how much they should expect to pay. If you’re buying property in Florida soon, these frequently asked questions about title insurance can help.
What is title?
Title to property proves that you are the owner of record, similar to the title of a car or boat. Your ownership is reflected on a document called a deed, which gets recorded in the County’s public records where the property is located. As title holder, you have the exclusive right to own, use, and sell the property — within the limits of any laws, local zoning codes, and Condo/Homeowners Association rules, if applicable.
What is a title search?
A title search is a search of the public records which reveals the owner of record and any documents that are recorded against the subject property. The search documents how and when previous owners relinquished the title. (This history is called a “chain of title”). We perform a title search before every closing to reveal what issues need to be resolved so that the buyer can receive free and clear ownership at closing.
Why do I need title insurance?
Sometimes there’s an unknown link in a property’s chain of title. For example, poor record keeping can hide a previous owner or lienholder. Later, that previous owner or lienholder could assert a legitimate claim to the title. Title insurance protects real estate purchasers from being on the hook for these outstanding claims.
Will the lender’s title insurance cover me?
No. The lender's title policy (also known as a loan policy), which all lenders require as a condition of issuing a loan, only protects the lender. Lenders require that Buyers purchase a loan policy because they know their collateral (the property) is in jeopardy in the event of an ownership dispute.
How often do you pay title insurance?
Once, at closing. A one-time premium provides buyers with title insurance coverage for as long as you own the property. However, if you refinance the property, your new lender will require a new loan policy, but there are savings that you are entitled to in certain instances (called a re-issue credit) - ask us about this!
Do I have to buy title insurance again when I refinance?
Yes and no. The new refinance lender will require its own title insurance policy. However, if you bought owner’s title insurance, you won’t have to buy it again when you refinance. The original policy will continue to provide coverage until you transfer ownership to someone else.
How much does title insurance cost?
Title insurance rates vary by state. In Florida, state law establishes the premiums. This is called a promulgated rate:
$575 for the first $100,000 in title insurance coverage
$500 for each additional $100,000, up to $1 million in coverage
So, $200,000 in owner’s title insurance would cost $575 for the first $100,000 and $500 for the second $100,000. That totals $1,075 (not including third-party fees).
This price doesn’t reflect the Butler Rebate, which can save Florida property buyers money. Butler Title issues this rebate to all its clients, even if they don’t ask about it.
How long does the title insurance policy last?
The owner’s policy lasts as long as you own the home. The lender’s policy lasts until you pay off the mortgage or refinance it.
Why should I buy title insurance?
Title insurance offers a simple and affordable way to protect a real estate investment - and a house is often the largest investment of most people’s lives. Lenders know this. That’s why they require coverage as a condition of the loan. Opting to add an owner’s policy extends that protection to you.
How do I file a claim on my title insurance policy?
Although rare, you may need this information. Your title insurance policy is issued and backed by a title insurance company/carrier, who ultimately would be the party paying your claim. Butler Title is an agent of Fidelity National Title, the largest title insurance underwriter in the country. If you ever find yourself in need of potentially filing a claim - just call us to help connect you with the appropriate contacts.
Do you have more questions? Please let us know!
Butler Title is a full-service, attorney owned and operated title insurance agency. We keep it simple and focus on what we do best: real estate closings. From first-time buyers to local moguls, BT provides an industry-leading fee structure and unparalleled experience.
P: 954.616.8735 F: 954.206.1097