Why do I need title insurance? Well, primarily the title insurance covers you so if there is any title defects in the property that they will pay for it.
Say, 50 years ago how you made sure that you had clear title or marketable title to the property is you relied upon an abstract to the property and then an attorney would give you a written opinion as to whether or not the title was clear after examining an abstract.
That time has long since passed because let’s say the lawyer missed something. Well, then you would have to sue the lawyer because he did not find it or made a mistake. And if the lawyer (A) didn’t have any money or (2) was dead or not available or moved away, well, you were stuck.
So they have come in with title insurance so now you have an insurance company to look at your title and guarantee that you have marketable title that covers any things that are missed in the search as well as things such as forgeries or things that do not appear in the public records.
But the biggest thing that title insurance does is you are assured that someone has examined the title and done a title search to see if there is anything there so it’s more of a preventative matter rather than a remedial matter. And, therefore, it’s a small percentage of what the purchase price is. It certainly does not cost like homeowner’s insurance.
But also, title insurance you need to hang onto it even after you sell the property because later on if there is a title defect and someone wants to sue you on the warranties that you have given under a Warranty Deed, you can then call on your title company to defend you because they insured that you had marketable title.
So the primary reason for a title policy is that you know someone has examined the title and that you are getting the property free of any liens and that it’s only subject to various easements of the Condominium’s or Homeowner’s Association which also you can ask for copies of those. So it is informative, preventative and also gives you assurances or insurance against any defects that were missed.
So I would strongly recommend title insurance and usually the seller pays for that in the Tampa Bay area. And in the Miami, Broward and Palm Beach area I believe that the buyer buys his own title insurance instead of the seller.
So if you have any questions about title insurance give me a call at 727-847-2288.