Title Insurance is usually one of the larger charges in a buyer’s or seller’s total closing costs. For this reason, it is important to understand some very crucial elements of title insurance policies, such as: What is title insurance? What type of policies are available? How much does it cost? And, who is paying for this?
So, we went ahead and collected some of the most up-to-date information about title insurance in Florida and we will continue to update this page as applicable with any changes or new information on title insurance as it becomes available, so stay tuned!
Title Insurance is an insurance policy that protects either the owner of a real estate property, or their lender/mortgage holder against any financial loss they might suffer due to undiscovered defects to the title of that real estate property.
Defects to a title of a property can most commonly include things like back taxes, dues, easements, violations, liens and sometimes even conflicting wills that had not been discovered at the time the property was purchased.
In the State of Florida, Title Insurance is regulated by the Florida Department of Financial Services.
Only licensed professionals can examine title, clear title, and issue title insurance policies. Such individuals must also be appointed by a Florida admitted Title Insurer, who will ultimately provide the actual coverage of your policy.
The Title search is conducted by the title company who will eventually issue the owner’s and lender’s policies and should be provided to both parties for their review, upon request.
Title Search, which is sometimes referred to as a “Title Exam”, is an extensive examination of different reports, public-record resources, and property surveys to confirm the legal ownership of a real estate property and alert about any pending claims or defects that can potentially affect the ownership of a property and determine the “marketability” of the title to that property.
Title Search is not only a basic requirement before a Title Insurance policy can be issued, but it is also an important tool for buyers and title companies to ensure that the seller provides a title that is “free and clear” of any defects.
Once the title search is completed and a list of pending title defects has been found, the issuing title company will start working on that list, item by item, to ensure each defect is fully cured before the title can be properly transferred.
This process is called “title clearing” and when done correctly, it will eventually create a “clear and marketable title” that is free of any defects and is ready to be transferred from the seller to the buyer.
The cost of Title insurance in Florida is calculated with a state mandated formula that is based on the price of the property that is being sold. Title Insurance premiums are only paid one time, at the time of closing, unlike other types of insurance premiums which are usually paid monthly or annually.
Title insurance premiums rate calculation in Florida is similar to the “millage rate” used to calculate property taxes, when a specific rate is assigned per each $1000 of the property price. The current title insurance rate, as determined by the state of Florida is:
As previously discussed, Title Insurance is one of the more significant items included in your closing costs. The party that is paying for title insurance is usually negotiated under the terms of the contract, but there are also some “defaults” in Florida, which can change based on the county that traded property is located in.
It is important to remember, that even if the other party is paying for the title insurance in your transaction, you might still be responsible for other closing costs or title related charges. Make sure to speak to your realtor, or ask the issuing title company, to verify the exact charges and total amounts that you will be responsible for.
Get a quick estimate of your expected title insurance premium rate, as well as some other closing costs items you should probably be aware of.
Don’t be surprised at the closing table!
In Miami-Dade and Broward counties, it is usually customary for the buyer to pay for title insurance. However, according to the designated Miami-Dade/Broward Provision of the Florida Standard Purchase and Sales Agreement, even if the buyer pays for the title insurance, the seller may still be responsible for other title charges, such as the title search and municipal lien search.
In Palm Beach County, as in most other Florida counties, the seller is usually paying for title insurance. The seller of a property in Palm Beach County will usually also cover other title charges, like title and lien search.