IS GETTING AN OWNER’S TITLE INSURANCE POLICY A GOOD IDEA_

IS GETTING AN
OWNER’S TITLE
INSURANCE POLICY
A GOOD IDEA?
FLORIDA TITLE INSURANCE
Title insurance companies write two kinds of insurance
policies. The most prevalent are policies that protect the
interests of the mortgage lender should there be a
problem with the title. Should the borrower default,
lenders want to be able to foreclose and take possession
of the property without worrying about outstanding
claims?

insurance policies also cover the cost of resolving
Title
known as curing) most title problems (also known
(also
defects) uncovered during the title search. Common
as
include, but are not limited to, the following:
defects
liens (for unpaid taxes)
Tax
liens, also known as mechanics’ liens
Construction
unpaid construction or renovation bills)
(for
lines (for instance, an unpaid balance on a
Creditor
mortgage)
preexisting
judgments (for instance, a post-divorce
Court
awarding part of the property to a former
judgment
spouse)
insurance policies cover future costs arising from
Title
disputes. For instance, the holder of a valid title
title
policy wouldn’t have to pay out-of-pocket to
insurance
against a lawsuit brought by contractors
defend
that their companies had liens on the
claiming
stemming from a previous owner’s unpaid
property
require borrowers to pay the cost of the title
Lenders
and the policy that protects them. The cost if
search
search and lenders’ policy is roughly .5% of the
title
of the home, but it can vary considerably, from
cost
$1000 to $2500 or more based on the cost of the
under
the state where it is located and the title
home,
The new “know before you owe” forms
company.
by Consumer Finance Protection Bureau were
required
to help consumers shop and save on closing
designed
like title insurance.
costs
companies also provide policies that protect the
Title
of homeowners. Usually issued in the amount
interests
the real estate purchase, owners’ policies provide
of
against claims resulting from unpaid
protection
heirs who could claim the property belongs to
missing
or her and missed easements or rights of way that
him
LENDERS VS. OWNERS’ POLICIES
WHAT TITLE INSURANCE COVERS
mortgages; unpaid property taxes; child support liens;
could limit your use of the property.
renovation bill.

title companies provide owners’ policies
Most
a significant discount because the don’t have
at
conduct an additional search. They can use
to
same search performed for the lender to
the
the owners’ policy.
underwrite
a claim is legitimate or not, an
Whether
policy provides protection and covers
owners’
costs should someone sue and argue they
legal
a claim against the home from before you
have
it.
purchased
live in a litigious society. An owners’
We
will protect you from events that
policy
before you bought the property.
occurred
may include errors in recording deeds,
These
errors, or heir of a past owner who
surveying
a claim against the title.
makes
the value of lenders’ policies decline as
While
principal of the mortgage is paid off,
the
policies remain in full effect for as
owners’
as they, or their heirs, own the property.
long
with a discount, an owners’ policy could
Even
hundreds of dollars needed elsewhere.
cost
a new home, the risk of a title dispute
On
because no one else has owned the
minimized
home the and the builder certainly made
new
he had clear title before he invested
sure
in developing a community.
millions
a later date when more cash is available,
At
owner can always get title insurance,
an
he will pay full freight for the search
though
title. and
risk of having a claim against your title is
The
low.Title insurance companies pay
relatively
about 5 percent of the premiums their
out
on claims, relatively low compared to
receive
forms of insurance. The risk of a claim
other
your title is probably lower than a
against
that would be paid by your car or home
claim
are the pros and cons of
Here
an owner’s title policy
buying
Pros:
Cons
insurance.
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