Title Insurance, what is it and why do I need it?
Premier Settlement is a licensed, bonded and insured title insurance company. Unlike other forms of insurance that protect you from what might happen in the future, title insurance protects your ownership from mortgages, liens, interests, and encumbrances that may already exist. So, whereas other insurance seeks to protect you from potential risks in the future, the purpose of title insurance is to protect you from the day when you buy your home. For a one-time fee, your interest in the property is protected against certain liens or encumberances that might affect the title to the property that were created prior to your ownership, for as long as you own the property.
Frequently Asked Questions
What does title insurance cover?
Title insurance covers underlying issues with a home or property’s title. Prior to closing, we will obtain a public records search to ensure that the home being purchased is free and clear of any liens or ownership disputes. This process also confirms the seller’s legal right to sell the home.
While the process usually goes smoothly, title insurance comes into play when a dispute arises. Here are some of the common title issues that we encounter:
- Title forgeries;
- Back taxes;
- Filing errors;
- Unknown heirs to the estate who claim ownership;
- Inconsistent or conflicting wills;
- Liens, commonly from unpaid home equity lines of credit (HELOCs) or contractor bills; and Certain easements and encumbrances.
What are the types of title insurance?
What is lender’s title insurance?
A lender’s title policy is designed to protect the financial institution providing your mortgage from title claims that would put their mortgage at risk. Lenders require borrowers to purchase title insurance on the lender’s behalf as part of the loan-approval process.
What is owner’s title insurance?
The owner’s title policy is designed to protect the homeowner in the event of a claim against their ownership of the home. In most cases, owner’s title insurance is not required in a home purchase, but it is recommended.
How much does title insurance cost?
The cost of title insurance generally ranges between $1,000 and $5,000 for each policy, but will vary based on the purchase price and the extent of the coverage. In the state of Florida, rates are set by the Florida Department of Insurance, and is a function of your purchase price. As a result, the cost of title insurance is the same, regardless of the provider, so choosing the best company is important.
Unlike other insurance premiums, which must be paid annually, a title insurance premium is paid one time only at closing.
