Title insurance can play a critical role in guarding against losses when buying a property. Whether you’re buying a home or investing in a commercial property, title insurance can protect this major investment. Although policies vary, title insurance often covers losses that could otherwise result from such title defects as:
- Liens
- Ownership disputes
- Encumbrances
- Public record errors or omissions
Essentially, title insurance offers you peace of mind, ensuring title defects don’t negatively impact your finances. That’s why it’s important to choose an ideal title insurance policy for your needs when reviewing your potential options. Tips for selecting the right policy include the following:
Familiarize Yourself With the Different Types of Title Insurance
Title insurance policies come in two general forms: owner’s policies and lender’s policies.
As the name implies, the lender’s policy ensures the mortgage lender doesn’t incur financial losses due to title defects. Although it’s wise to obtain this type of policy when buying a property, odds are your lender will require you to do so anyway. They might refuse to approve a loan if you fail to take this step first.
Buying an owner’s policy technically isn’t a requirement in most transactions. However, it is a wise idea. While the purpose of the lender’s policy is to protect the entity loaning you the money to buy a property, an owner’s title insurance policy directly protects you.
Check if a Title Insurance Policy Offers Comprehensive Coverage
When buying any type of insurance policy, be aware that coverage can vary from one specific policy to another. Title insurance is no exception.
Your goal is to find a title insurance policy that offers the maximum protection you need. One way to narrow down your options is to look for policies offering comprehensive coverage.
Some policies may only offer coverage for specific title defects. Others may fail to offer coverage for certain defects that could put you at risk of incurring financial losses. A truly comprehensive policy will offer coverage for the full range of potential title defects, including:
- Public records errors
- Fraud or forgeries
- Missing heirs
- Undisclosed heirs
- Liens and encumbrances
- Encroachments
You may have to account for your budget when choosing a title insurance policy as well. Just keep in mind that title insurance is a financially-beneficial investment. By purchasing a strong policy, you could potentially avoid financial losses in the future.
Consider Extended Coverage Title Insurance Policies
Depending on your circumstances, you may need a title insurance policy that covers more than what a comprehensive policy typically covers. Examples of issues that might necessitate extra coverage include (but are not limited to):
- Issues regarding zoning or land-use regulations/violations
- Access rights issues
- Mineral and/or water rights
- Building permit violations
- Environmental issues that may require costly remediation
- Restrictive covenants
Coordinate with your attorney and anyone else who may be able to help you come up with a list of issues for which you may need coverage. If you can’t find a policy that already offers the necessary coverage, you may be able to add an “endorsement” to modify an existing title insurance policy so that it better serves your needs.
Work With a Reputable Title Insurance Policy
If providing you with peace of mind is one of the main functions of a title insurance policy, you should purchase one from a company prepared to offer the quality service you deserve. You’ll be more confident in the strength of your policy if you buy one from a company that works closely with you to offer the right coverage for your circumstances.
That’s exactly what you will find at Florida Title Center. We’re on hand to offer a policy that thoroughly protects you from losses associated with title defects and any claims that others might make against a property after you purchase it. To learn more about what we can do for you, contact us online or call us at 954-848-4224.
