Question 1

What is a title insurance policy?

Accepted Answer

A title insurance policy is a contract of indemnity that protects the insured against financial loss from defects in title to real property. In Florida: title insurance is issued by: a title insurance company (underwriter), through a title agent or attorney. Two types: owner’s policy (protects the property buyer; covers the purchase price; lasts as long as the owner or their heirs own the property), and lender’s policy (protects the mortgage lender; covers the loan amount; decreases as the loan is paid down). Coverage: the policy covers losses from: defects in title that existed before the policy date, liens and encumbrances not shown on the title commitment, and claims of ownership by third parties.

Question 2

What are the standard exceptions in a Florida title insurance policy?

Accepted Answer

Standard exceptions: rights of parties in possession (tenants or other occupants whose rights are not shown by the public records), survey matters (encroachments, boundary disputes, and other survey-related issues), easements or claims of easements not shown by the public records, any lien for services, labor, or materials (construction liens that have not yet been recorded), and taxes and assessments for the current year (which may not yet be due). Many of these exceptions can be removed by: obtaining a current survey, obtaining an inspection of the property, and obtaining a title search that extends to the current date.

Question 3

How is a title insurance claim processed in Florida?

Accepted Answer

Claim process: the insured notifies the title company of the claim (in writing, as soon as the insured becomes aware of the potential claim), the title company investigates the claim (reviewing the policy, the title records, and the facts of the claim), the title company makes a coverage determination (whether the claim is covered under the policy), and if covered: the title company defends the insured (at the company’s expense), resolves the claim (by settlement, negotiation, or litigation), and pays the insured’s loss (up to the policy amount). The defense obligation is particularly valuable: the title company pays all legal costs to defend the insured’s title.

Policy of Title Insurance

Title Insurance Policies

Types

Standard Exceptions

Claims

Related Terms

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