What is Title Insurance?
Unlike other insurance Title Insurance is only paid one time. There are no payments year to year or month to month. Title Insurance is paid out of the funds at the closing. Most lenders require that title insurance be obtained as a condition of the mortgage. Like other forms of insurance you pay the insurance company's agent the premium amount. Guess what? We are agents for First American Title Insurance Company. There is no additional charge for this service. You pay only the premium rate. (See below on how much to purchase.)
Why Do I Need Title Insurance?
Let's start with an example.
When you purchase a car you are given a title to it. This shows your ownership interest in the vehicle. When looking to buy a car you could search its title to see who has owned it before you. While searching the title you may find that the title history shows that the vehicle is stolen. Then you would not want to purchase that car. The search has protected you from someone else claiming that they own the vehicle.
Homes similarly have a title. This tracks how the land and home are owned over time. This would include things such as easements. Many utility companies and cities have easements over private property. Waterfront homes might have a public access over them, so that people can get to the beach. If you look at the property you will likely not see anything which would indicate to you that someone else has an interest in the property. You might buy a home and want to put a pool in the back yard. After the sale you go to get your building permit for the pool and it is denied because a utility company has an easement through your neighborhood to install lines or pipes at some time in the future. You would not have bought this home had you known of this easement. Title insurance will help to protect your investment from people who later make claims against your property.
How much insurance should I buy?
The purchase price of the house will determine the amount of insurance you buy. You don’t have to worry about buying too much or too little. The rate you pay is determined by the price of the home. The premium rate is established by the State of Florida.
