Cottrell Title & Escrow Blog

Why Do You Need Title Insurance?

Real estate agent reviewing closing documents from Cottrell Title & Escrow with home buyers

Date: November 15, 2021

The decision to buy a home is one of the biggest life decisions, and title insurance is an essential part of it. Title insurance covers potential damage from errors in the ownership records of your home or property. It will pay the insured party if there’s anything wrong with the title.

How Title Insurance Works

When you are buying a home, checking the property’s ownership history is part of the process. If your home comes back with a clear title that means the current owner who is selling to you has a complete ownership stake in the property without any legal claims against it.
Even with a clean title, title insurance is still necessary. The U.S., the recorder of deeds doesn’t guarantee perfect accuracy in its record keeping. There would be mistakes in the ownership history, a previously unknown heir, pending legal judgements, fraud or forgery that arises.
After a loan closing, a title defect can lead to a variety of legal costs and even the loss of your property. There is a cost associated with title insurance, but it is certainly necessary when you consider the potential loss you can incur without it. With title insurance, you are protecting the investment of your home.

Is Title Insurance Required in Florida?

There are two types of policies involved in a home closing – the lender’s policy, which is required, and an owner’s policy, which is optional.
While owner’s insurance is optional, the buyer will not be protected by the lender’s policy if an owner arises. That’s why an owner’s policy is recommended to protect yourself & your property from future claims.
Both types of title insurance are a one time, upfront cost that is part of the home’s closing costs.
If you need more information about title insurance in Florida, the team at Cottrell Title & Escrow is here to help. We are dedicated to simplifying the world of real estate for all parties of a transaction. Contact us today to learn more!