Owners title insurance is an optional closing cost when buying or refinancing a property. It can be bought once by a homeowner and will cover title issues for the entire time that they own the home. Understanding what title defects include can help buyers decide whether to purchase a policy. What are title defects in Florida can be found below.
What Are Title Defects
Title issues are not typical but they can have a major impact when they do occur. Defects are conditions that make it difficult to identify the legal owner of a home. Although a title search is completed before most homes are purchased, many issues are not obvious and can therefore stay hidden for several years and across several title transfers. Any known defects must usually be resolved before the completion of a sale, but in cases where they are not uncovered, title insurance can protect the homeowner of the home.
Title Issues Covered by Owners Title Insurance
Title defects can come in many shapes and forms. Below are just a few examples (keep in mind that coverage can vary by insurance company).
- Missing Parties
- Unreleased Liens
- Missing Releases
- Failure to Comply With Correct Recording Instructions
- Undocumented Easements
- Undisclosed Heirs
- Forged Documents
- Mental Incompetence of a Party
- Name Confusion
- Incorrect Legal Interpretations
Why Buy Owners Title Insurance
If you have title insurance, the insurance company may either resolve a problem or cover your resulting losses. It could even cover defending against a law suit jeopardizing your ownership rights. Policies are purchased based on a specific dollar amount, so coverage limits do apply. Additionally, specific issues may be excluded from your policy. Ask your closing agent for a complete list and for more details on what are title defects in Florida. Ultimately, owners title insurance is the best protection of your ownership rights to a home. Although the fee can be significant, it is due only once and remains effective for as long as you maintain ownership. It is certainly worth the expense given that a property can be the largest investment that you make in your lifetime.