Title Insurance

Title Insurance Questions & Answers

What is title insurance?

• Title insurance is a form of indemnity insurance which insures the policy holder against financial losses associated with title defects, invalidity or unenforceability of mortgage liens, closing errors, etc. on real property. In most cases, title insurance is sold when real property is conveyed, although it may be purchased independently. Title insurance can be purchased through a title insurance agent who, may or may not be a Florida licensed attorney.

Who pays for title insurance and how much does the title insurance cost?

• Typically, the Seller of real property purchases the buyer’s owner’s title insurance policy at closing. As this is a negotiable contractual provision, title insurance is sometimes purchased by the buyer; however, this is not common practice in Orange County, Florida. Title insurance varies in price according to the amount of insurance to be purchased. Title insurance rates are set forth in the Florida Statute 627. All title insurance agents must charge the minimum promulgated rates set forth in Florida Statute 627.

I am refinancing my property, do I have to pay for title insurance again?

• The majority of lenders require the borrower to purchase a mortgagee’s title insurance policy for the new mortgage lien on the real property. Therefore, you will have to pay for a new mortgagee’s title insurance policy. The good news is if you have your owner’s title insurance policy, then you can present it to the title agent and receive re-issue credit.

What is re-issue credit?

• Re-issue credit is a discount/credit applied to the cost of your new title insurance policy. To obtain re-issue credit, you will need to present a copy of your owner’s title insurance to the title agent before closing. Re-issue credit will only be given to you if you: (a) are selling your property and have an owner’s title insurance policy with an effective date less than three (3) years after the effective date of the policy, (b) have a policy for unimproved property (except for roads, bridges, drainages, utility facilities, utilities), or (c) are refinancing your property.

What is a title search?

• A title search is one of the most important items in a real estate closing. A title search is the process of examining all the public records related to the property to make sure the seller is the legal owner to the property and there are no outstanding claims against the seller which would prevent the seller from conveying clear, unencumbered title to the buyer.