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What Is It?: Title Insurance

If you’ve purchased property before, chances are you know how important title insurance coverage can be. If you’re a first-time buyer, you may not. A title insurance policy is offered through a title company that handles the closing on your property.

What can title insurance do for you?

You’ll likely be closing on your property through your selected title company. Title insurance is basically a way to give all parties peace of mind in any property transaction.

Before the title insurance policy is drawn up, title companies and their title agents prepare and conduct a title search to ensure there are no defects or issues associated with the title of the property that could compromise your ownership rights. Once completed, the company will offer title insurance which essentially protects you from any defects (such as unpaid taxes or liens) associated with the property. Each property has a unique public record with information related to prior transactions or other associated events.

Title insurance can also help clear any other ownership claims that other parties may have to the property, as well as any debts owed to creditors from previous property owners.

What does it cover? Well, in Florida, both the buyer and the seller of the property may purchase policies. There are two main types:

  1. Lender’s Policy – this type of title insurance protects the lender against any claims other parties may have against the property; mortgage loans often require the lender to have this type of insurance.

  2. Owner’s Policy – this type of title insurance is meant to protect the new owner from any debts or liens associated with the property.

Unlike most other types of insurance, title insurance is a one-time premium and the coverage lasts as long as you remain in ownership of the property. Sometimes you can even lower the cost by purchasing multiple policies from the same company. While typically it is the title company and title agent who prepare and sell the title insurance, an attorney can also sell it.

If you have any questions about your current or future real estate transaction, call our team of attorneys at the Kendrick Law Group and Champion Title & Closing to learn more or to obtain one of our customized closing guides.

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