The perception of Title Insurance is that for every $100 that gets paid into the pot, only $6 of that gets paid out. The reality is that for every $100 paid in, $94 goes into making sure no more than $6 will have to go towards a title claim.
While Title Insurance takes on the financial responsibility for title-related issues, that financial responsibility is limited to the policy amount—the cost is much greater than what’s covered. The power of Title Insurance is the preventative work that goes into it.
Title Insurance is NOT casualty insurance—Title Insurance is PREVENTATIVE insurance.
Coverage:
Title Insurance coverage is unique because it reaches both forwards and backwards at the same time to protect the homeowner.
Title Insurance is good from the beginning day of the policy backwards. It covers everything that happened before the real estate acquisition, including all unforeseen title flaws, and the policy pays for litigation should someone challenge the ownership through a lien, claim, or taxes.* Thus the coverage protects the homeowner during their ownership of the property and for everything that happened before they took title.
Title Insurance insures the homeowner’s financial interest forwards into the future, even protecting them after they sell that property. Because the Contract for Purchase and Sale typically requires the Seller to convey ownership with warranties, the Seller becomes responsible for anything that has ever transacted on the property. Thus the homeowner retains liability for their link in the Chain of Title even after they sell. A Title Insurance Policy protects the homeowner for as long as that person has a financial liability to the property…which is until death.
Service:
The Title Insurance company’s objective is in lockstep with the consumer’s best interest: to avoid questions or challenges of the homeowner’s title. Owner’s Title Insurance is primarily for prevention of claims against home ownership, and a title search is part of the risk assessment. Thus in the examination of public records, the title company has a vested concern to find any and all complications to the ownership title, in fact to kick the proverbial sleeping dog…on purpose. We’d rather find out now (rather than after the fact) whether or not that dog has teeth and a temperament for biting.
Though Title Insurance works mostly through prevention, it offers security via financial protection from the massive costs of litigation and other legal expenses should a problem, challenge, or complication to a Florida homeowner’s title arise. No matter how much effort is put into this prevention, bad things still happen. It’s expensive to be right when someone thinks you’re wrong. (Just remember, another person’s perception is reality.) Owner’s Title Insurance provides and pays for all costs associated with a title claim (whether through settlement, legal defense, and / or reimbursement of the policy amount to the homeowner if that defense does not prevail).
Cost:
The cost of Owner’s Title Insurance is promulgated by the State of Florida, and the current rate has been the same for over 20 years. It is a nominal fee compared to litigation costs. Furthermore, Owner’s Title insurance is a one-time fee, typically paid at the closing of a real estate transaction. Once it’s paid, it’s paid—no monthly premiums, no annual fees—no additional charge to the consumer, the homeowner.
With Owner’s Title Insurance, consumers pay a set amount for financial protection against the unknown cost of hidden risk to home ownership.
The Big Picture:
Title Insurance plays a vital role in Florida’s recovering housing market. As a source of financial protection, Owner’s Title Insurance assures potential Florida buyers they can invest in real estate with stable value backing that investment.
Owner’s Title Insurance adds real value to real estate rights, thus it benefits every Florida citizen.
Any further questions, tune into “Land Title Talk,” on the First and Third Thursday of each month from 8:00 to 9:00 a.m. on 102.1 FM WFOY (http://www.1021news.com). Please call or text during the show to comment or ask about real estate-related issues.
*Please note Title Insurance does have exceptions.
