Buying a home in Florida is an exciting milestone, but protecting your investment is just as important as finding the perfect property. One critical aspect of a secure real estate transaction is title insurance—a safeguard against potential legal and financial risks tied to your property’s ownership history.
In Florida, there are two types of title insurance:
- Lender’s Title Insurance – Protects the mortgage lender’s interest in the property.
- Owner’s Title Insurance – Protects you, the homeowner, from title-related issues.
Let’s break down what each type does and why they’re essential.
What is Lender’s Title Insurance?
Lender’s title insurance is a requirement for most mortgages in Florida. It protects the lender from financial losses due to title defects that may arise after the purchase.
What Does It Cover?
Lender’s title insurance safeguards against:
✔ Unpaid liens (e.g., contractor liens or outstanding mortgages)
✔ Fraud or forgery in prior ownership documents
✔ Errors in public records (such as incorrect legal descriptions)
✔ Undisclosed heirs who claim ownership
✔ Title defects that could invalidate the lender’s security interest
Who Pays for It?
- In most of Florida, the buyer typically pays for lender’s title insurance.
- In some counties, like Miami-Dade, Broward, Collier, and Sarasota, the seller customarily pays.
- This can be negotiated in the contract.
What is Owner’s Title Insurance?
Owner’s title insurance is optional but highly recommended for buyers in Florida. It protects your property rights and financial investment from unexpected title disputes—even after you’ve purchased the home.
What Does It Cover?
An owner’s title policy helps protect you from:
✔ Clerical errors or mistakes in past deeds
✔ Unknown heirs who claim ownership
✔ Fraudulent transfers or forgeries in past ownership
✔ Unpaid property taxes or assessments
✔ Conflicting wills or estate disputes
Who Pays for It?
- In most of Florida, the seller typically pays for owner’s title insurance.
- In counties like Miami-Dade, Broward, and Collier, the buyer often pays.
- Again, this can be negotiated in the contract.
Why Both Policies Matter
While lender’s title insurance only protects the lender, an owner’s title insurance policy protects you as the homeowner. Without an owner’s policy, you could be responsible for legal fees or even risk losing your home in the event of a title dispute.
A one-time premium at closing provides long-term protection for as long as you own the property.
Final Thoughts: Is Title Insurance Worth It?
Absolutely! Real estate transactions in Florida involve multiple parties and historical records, making it crucial to ensure your home’s title is clean and protected. With lender’s title insurance, your mortgage lender is covered, and with owner’s title insurance, you gain peace of mind knowing your ownership is secure.