Frequently Asked Questions

What is a title insurance policy?
    A title insurance policy indemnifies the insured party against losses if title to the property is not as the policy states it to be. From the buyer's perspective, title insurance is a way to protect against financial loss in the event that problems develop regarding the rights to ownership of your property. There may be hidden title defects that even a careful title search will not discover. In addition to protection from financial loss, title insurance pays the cost of defending against any covered claim. A policy of title insurance may be purchased from a licensed title insurance company. The purchase price for the policy is called the "premium."

The lender already requires title insurance, why does the buyer also need title insurance?
    There are two types of title insurance policies, a lender's policy and an owner's policy. A lender's policy insures only the mortgagee. This policy assures the financial institution that it has a valid, enforceable lien on the property and that the mortgage it has taken has the required priority. Lenders typically require the borrower to pay for it. An owner's policy protects the buyer from title defects that existed prior to the issue date of your policy. If a valid claim is filed, the owner's policy covers the full cost of the legal defense of the buyer's title and any financial loss up to the face amount of the policy.

What is a title search?
    A title search provides a brief summary of the recorded instruments that affect the title to the particular parcel of land being searched. It differs from a title abstract in that an abstract provides copies of all the recorded instruments that affect title to the parcel of land in question, including the original property from which the parcel in question was taken.

What is a title insurance commitment?
    A title insurance commitment is a temporary agreement by the title insurance company to insure title to the subject property in the form and as of the date set forth in the commitment once the premium is paid. The commitment is initiated by a customer's order and is valid for a period of ninety days. A title company has no obligation under a commitment except to issue a policy when the premium is paid in a timely fashion.

What is gap coverage?
    The "gap" is the period between the effective date of the commitment and the date of recording the deed and mortgage. Significant changes in title to the property could occur during this time so it is very important to 'cover the gap', that is, to update the title commitment to the exact time of the recording of instruments. This will ensure that the title policy will not contain any unanticipated problems.

Does the buyer pay for the title insurance premium?
    Although the matter is subject to negotiation between the parties, in Florida the seller generally pays the title insurance premium due for the owner's policy, while the buyer pays the premium for the lender's policy.

What happens if my property is covered by title insurance and a claim is made against it?
    The title company defends the title to the property, even if it goes to court. The title company bears all expenses.

Does a title insurance policy guarantee that a title is free of any imperfections?
    No, a title insurance company will often cite exceptions to coverage that is has found in its title abstraction. There are also a number of standard exclusions and exceptions to coverage. In addition, title insurance companies occasionally insure over risks that they consider insignificant or unlikely to cause a problem.
    A standard owner's policy covers failure of title to the property, defects in or encumbrances against the property, lack of a right of access to and from the property, and non-marketability of title to the property.
    A standard lender's policy may add coverage pertaining to the invalidity or unenforceability of the lien of the insured mortgage; the priority of any lien or encumbrance over the lien of the insured mortgage; and certain mechanics' or construction liens.

What items are needed at closing?

Buyer

• Buyer's copy of purchase agreement
• Cashier's check for amount needed to close
• Proof of casualty insurance
• Photo identification (passport, driver's license, or state-issued identification card)

Seller

• Seller's copy of purchase agreement
• Any unrecorded instruments that affect the title
• Proof of satisfaction of any mechanics' liens, chattel mortgages, judgments, or mortgages that were paid prior to the closing
• Photo identification (passport, driver's license, or state-issued identification card)