Although state laws, administrative rules and judicial decisions that regulate the title insurance industry have changed over the years, the purpose of title insurance remains the same, protecting policyholders against loss in the event of disputes relating to title defects undiscovered during a thorough examination of the public records.
If you’re a homeowner looking for title insurance in Florida, understanding how a title policy can protect your assets is very important before you start shopping around for Florida title insurance.
To begin with, Florida title insurance covers claims arising out of title flaws that could have been found during the title search and claims that may result from so-called “off-record” defects, which couldn’t have been discovered by a standard title examination.
Now, let’s focus on three ways Florida title insurance can protect your assets.
1. Title insurance can help you make an informed decision.
Despite what many believe, real estate titles can be affected by various things and events, ranging from mortgages, tax liens and encroachments to divorce decrees and undisclosed heirs. To prevent certain problems from coming back to bite the new owner, the first thing title insurance companies do before issuing a title policy is to perform a comprehensive title search.
A title search involves a careful examination of public records (e.g. tax records, court judgments, divorce decrees, bankruptcy filings, wills, trusts, past deeds, etc.) to establish the chain of ownership and uncover any matters that could lead to hassles for the new homeowner. Then, the company compiles a preliminary title report that contains vital information, including all the defects that may affect the subject property and owners.
In the absence of a title search performed by professionals, many title clouds may remain hidden, potentially costing you a lot of money or, worse, affecting your legal right to own the property in the future. By simply opting for Florida title insurance before investing in a piece of property, you can find out not only if title defects exist but also what type of Florida title insurance policy the company intends to issue.
2. Title insurance reduces risks.
Since a title search can bring up a series of defects, it reduces the risk of title problems arising in the future. In addition, you can opt for extended coverage, which offers protection from risks that aren’t covered by a standard policy.
What’s more, if title issues are found, you have no obligation to act on them. The title insurance company will work together with the seller and the real estate agent to remedy the problems and offer you a clear title. As an example, if the seller had some construction done but didn’t paid the contractor, the title professionals will find the unpaid bill and require the seller to cover the remaining balance.
3. Title insurance also “solves” title problems.
In the event of a claim arising from a title defect covered by the policy, the title insurance company will either correct the problem or will compensate you for the actual loss, up to the amount of the policy. For instance, if someone made a mistake when recording the title of the property a few years ago or an unknown heir of the previous owner will claim ownership of the property in the future, the title insurance company can first try to work out a solution that’s agreeable to all the parties involved. If the problem cannot be solved amicably, the company will go to court to defend your title at its own expense and reimburse you for loss. Without title insurance, you might become responsible for paying debts and even lose your right of ownership.
In Florida, title insurance is regulated under Title XXXVII of the Florida Statutes, Chapter 627. To find out more about Florida title insurance and any other title insurance-related topics, we invite you to contact our professionals at (904) 992-1162 or email firstname.lastname@example.org.