It Depends on the County
One of the most common questions in Florida real estate is who pays for title insurance at closing. The short answer: it depends on where the property is located. Unlike some states that have a fixed rule, Florida follows local customs that vary by county.
These are customs, not laws. Nothing in the Florida Statutes dictates who must pay for title insurance. The responsibility is always negotiable between buyer and seller in the purchase contract. But if the contract is silent on the issue, local custom controls.
County-by-County Breakdown
Here is how the most common Florida counties handle title insurance costs:
| County | Who Pays for Owner's Policy? | Who Chooses the Title Agent? |
|---|---|---|
| Manatee | Seller pays | Seller chooses |
| Sarasota | Buyer pays | Buyer chooses |
| Hillsborough (Tampa) | Seller pays | Seller chooses |
| Pinellas (St. Pete) | Seller pays | Seller chooses |
| Lee (Fort Myers) | Seller pays | Seller chooses |
| Charlotte | Seller pays | Seller chooses |
| Miami-Dade | Buyer pays | Buyer chooses |
| Broward | Buyer pays | Buyer chooses |
| Collier (Naples) | Buyer pays | Buyer chooses |
| Palm Beach | Seller pays | Seller chooses |
| Orange (Orlando) | Seller pays | Seller chooses |
| Duval (Jacksonville) | Seller pays | Seller chooses |
Notice the difference: In Manatee County, the seller pays for title insurance and selects the closing agent. Drive 15 minutes south to Sarasota County, and the buyer pays and picks the agent. This catches agents and out-of-area buyers off guard all the time.
What Does Title Insurance Actually Cover?
Title insurance protects the policyholder against financial loss from defects in the title that existed before the purchase but were not discovered during the title search. Common covered risks include:
- Undisclosed liens (tax liens, contractor liens, judgment liens)
- Errors in public records or prior deeds
- Forged signatures in the chain of title
- Unknown heirs who claim an interest in the property
- Encroachments or boundary line disputes
- Unpaid HOA assessments
Unlike car or health insurance, title insurance requires a one-time premium paid at closing. There are no monthly payments. The policy protects the owner for as long as they (or their heirs) own the property.
Owner's Policy vs Lender's Policy
There are two types of title insurance policies in Florida:
- Owner's title insurance: Protects the buyer's investment in the property. This is the policy that is subject to county customs (who pays varies by location). It is optional but strongly recommended.
- Lender's title insurance: Protects the mortgage lender against title defects. This is required by virtually every mortgage lender in Florida. The buyer always pays for the lender's policy.
In a cash purchase (no mortgage), no lender's policy is needed. But the owner's policy is still important to protect your equity in the property.
How Title Insurance Costs Are Calculated
Florida title insurance premiums are promulgated (regulated and set) by the Florida Office of Insurance Regulation. This means the rate is the same no matter which title company you use. There is no price shopping on the premium itself.
The basic formula for owner's title insurance in Florida is:
- $5.75 per thousand for the first $100,000 of the purchase price
- $5.00 per thousand for each thousand above $100,000
For example, on a $400,000 home: ($100,000 x $5.75/thousand) + ($300,000 x $5.00/thousand) = $575 + $1,500 = $2,075.
If you are purchasing a property and also need a lender's policy, a "simultaneous issue" discount applies, reducing the lender's premium to $25 in most cases.
What Realtors Should Know
If you work transactions in both Manatee and Sarasota counties, pay attention to which contract terms your clients are signing. The FAR/BAR contract has specific checkboxes that determine who pays for title insurance and who selects the closing agent. Getting this wrong creates confusion and delays at the closing table.
A few things to keep in mind:
- Always confirm the county custom before drafting the contract, especially if your buyer or seller is relocating from a different part of the state
- The buyer always pays for the lender's policy regardless of county custom
- Everything is negotiable in the contract. A seller in Sarasota could agree to pay for the owner's policy as a concession, and a buyer in Manatee could offer to cover it to sweeten their offer
- Communicate the cost early. Title insurance is a line item that surprises buyers and sellers when they see the closing disclosure for the first time.
Barnes Walker handles closings in both Manatee and Sarasota counties daily. If you or your client have questions about who pays for title insurance on a specific deal, call us at 941-778-7721 or submit a title inquiry. We are happy to walk through the numbers.