Question 1

What is an owner’s title insurance policy?

Accepted Answer

An owner’s title insurance policy protects the property owner against losses arising from defects in the title to the property. Coverage includes: undisclosed liens (mortgages, tax liens, judgment liens that were not discovered during the title search), title defects (forged deeds, improper probate proceedings, undisclosed heirs, and recording errors), encumbrances (easements, restrictions, and other claims that affect the property’s use or value), and lack of access (if the property does not have legal access to a public road). The policy is issued at closing and protects the owner for as long as they (or their heirs) own the property.

Question 2

Is an owner’s policy required in Florida?

Accepted Answer

Requirement: an owner’s title insurance policy is not legally required in Florida, but: it is strongly recommended for every property purchase, most attorneys and real estate professionals recommend it, and lenders require a lender’s policy (which protects only the lender, not the owner). Without an owner’s policy: the owner bears the entire risk of title defects, a title defect could result in the loss of the property, and the cost of defending against a title claim can be substantial. The one-time premium is modest compared to the protection provided (typically $5.75 per $1,000 of coverage in Florida).

Question 3

What is the difference between an owner’s policy and a lender’s policy?

Accepted Answer

Distinction: owner’s policy: protects the property owner, covers the full purchase price, remains in effect for as long as the owner (or their heirs) owns the property, and the premium is paid once at closing. Lender’s policy: protects only the lender (not the owner), covers the loan amount (not the purchase price), decreases as the loan is paid down (and expires when the loan is paid off), and is required by most lenders. An owner purchasing with a mortgage should obtain BOTH policies: the lender’s policy (required by the lender) AND the owner’s policy (to protect the owner’s equity).

Owner’s Policy

Owner’s Title Insurance Policy

Coverage

Owner’s vs. Lender’s

Cost

Related Terms

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