|
WHAT
IS TITLE INSURANCE?
Title insurance protects you from losses
that occur from various matters affecting title
to land.
There
are two types of policies: the Owner's Policy,
which protects the owner of the property,
and the Loan Policy, which protects the
lender.
The
premium for the policy is only paid once,
and protects the insured for as long as
they own the property (or, for a lender,
as long as the loan remains on the property).
In Florida, the State regulates the premiums
for title insurance.
>>back
to top
WHAT
TYPES OF PROBLEMS DOES TITLE INSURANCE PROVIDE
COVERAGE FOR?
Before
issuing a policy, a careful search is made
of the county, state and federal records
that affect the property, but there are
many hidden defects that may affect title
that may not be obvious from this careful
review. Some examples are:
- Forgery
-
Fraud in the execution of documents
- Undue
influence on a grantor of a deed
- False
impersonation by someone purporting
to be the owner of the property
- Incorrect
representation of marital status
- Undisclosed
or missing heirs
-
Wills not properly probated
-
Mental incompetence of a grantor of
a deed
-
Transfer of title by a minor
-
Incorrect legal descriptions
-
Unsatisfied claims not shown on the
records
-
Deeds executed under expired or false
powers of attorney
- Clerical
errors in recording legal documents
- Confusion
due to similar or identical names
Title
insurance will pay for defending against
any lawsuit attacking the title as insured,
and will either clear up title problems
or pay for the insured's losses.
>>back
to top
IF
THE BANK GETS A POLICY, WHY DOES THE OWNER
ALSO NEED ONE?
The
Loan Policy (typically required by a lender)
protects the lender's interest only, that
is why a real estate purchaser needs an
Owner's Policy, which can be issued at the
same time as the Loan Policy, for a one-time
fee.
>>back
to top
WHAT
DOES AN OWNER'S POLICY COVER?
The
standard Owner's Policy provides extensive
coverage for the homeowner:
- Insuring
you are the owner of the property;
- Insuring
against losses from any liens or encumbrances
on the property except those listed
on the policy;
- Insuring
against your title being rejected by
a subsequent buyer because it is unmarketable
due to a title defect or lien; and
- Insuring
you have a legal right of access to
the property.
The
title policy not only protects you against
losses due to title claims covered by the
policy, it also pays for the attorney's
fees and costs in defending the title.
For
a one-time premium, you are covered under
the Owner's Policy for as long as you own
the property. You are also insured against
liability after you sell the property, in
accordance with the terms of the policy,
for covenants and warranty of title in the
deed to the new buyer (most Florida deeds
contain such covenants and warranty of title).
>>back
to top
|
