When You Buy a Home Do You Need Title Insurance?
I was recently speaking with my Mother about title insurance. Yes, my Mom is 85 years old, and we enjoy discussing many interesting topics.
Mom and I ended up speaking about what homeowners should be aware of in Florida.
That conversation made me realize that I should do a blog for first-time home buyers, homeowners and realtors. And that it should help people to understand the fundamentals and importance of title insurance for your home purchase.
The First Query Is: What Is Title Insurance?
Traditional insurance policies protect people against future losses. For example, your car insurance policy will protect you from future accidents, and your health insurance policy will protect you from future health problems. However, title insurance is different because it protects against claims for past occurrences.
Who Does Title Insurance Protect?
Two different types of title insurance exist. A real estate owner can choose to purchase title insurance and lenders will almost always elect to do so. Lenders will require title insurance in order to secure the bank’s interest in the property as a condition to loaning funds for the purchase. Furthermore, a property owner will purchase title insurance to protect his investment in their property. For most homeowners, their home is their most valuable asset. Surely it makes sense to know that the ownership of one’s most valuable asset will be protected by getting title insurance.
Can My Attorney Write Title Insurance?
Absolutely, yes. The lawyer who guides you through the process of purchasing your home will be an authorized agent for issuing title insurance. In Florida, most agents write on only one underwriter; it is called Old Republic and is the successor to a company originally established for lawyers by lawyers called Attorneys Title Insurance Fund.
What Type of Protection Does Title Insurance Provide?
As a lawyer, the first thing to do is a title search of the property. This search will minimize the potential liability to the property owners by discovering any foreseeable title issues. However, once a property owner purchases and takes possession of a property, title insurance will defend against any claim, problem, or litigation that challenges the legality of the new property owner.
How Much Does Title Insurance Cost?
Unlike traditional insurance companies where monthly payments are required, title insurance is a single payment. The calculations for premiums charged is set by the State. They are set as “promulgated” or standardized amounts of money, based on the value of the home. They are set by both Statute and the Administrative Code. Rather than being with the rules about property, they fall under the same category of administrative rules that all insurance in Florida is regulated under. They fall under the Florida Department of Insurance.
Based on the Insured Amount, Florida Title Insurance Rates are $5.75 per $1000 for policies up to $100,000. That means a total cost of $575 for $100,000 of coverage. For homes worth over $100,000 up to $1 Million, the rate is lowered to $5.00 per $1000. If a home is over $1 Million up to $5 Million, that rate lowers further to $2.50 per $1000.
So for larger policies, the rate is declining. The premium is paid only once, and is valid for the entire time you own your house!
Buying a home is one of life’s most important decisions. Protecting that investment should be a must. Let Rignanese & Associates conduct your title search and issue a title insurance policy to protect your home. Please reach out to us at our mailing address of PO Box 2012, Winter Haven, Florida 33883, via email to LadyLawyerCynthia@gmail.com or at (863)294-1114.
© Cynthia Crofoot Rignanese, 2018