Real Estate News

Florida issue highlights need for title insurance

Published: 03 Oct 2017

Title insurance is "just one of those things" many homebuyers or sellers may accept as part of the sales process without really understanding what it is or why it's important. To many, it may be just another added expense for them to cover, but it can be crucial in certain situations. One recent situation in Florida highlights why.

A mobile home in Florida purchased by a family more than two decades ago was recently up for sale, but during that process, the owners found that the title was never transferred to their names at the initial point of purchase in 1995, according to The Washington Post. In this specific case, the house itself is a mobile home, which actually carries a separate title from the land on which it was built because a mobile home can technically be considered personal property, rather than a permanent structure on the land.

Because this is a mobile home, the process can be a lot more complicated, but title insurance companies generally deal with any disputes or mistakes related to ownership of properties and permanent homes. To that end, it's important to note such issues are more common than many consumers may expect, so having the right coverage goes a long way toward ensuring all involved are properly protected before, during and even long after a sale.

Title insurance can add significant protections during and after the sales process.Title insurance can add significant protections during and after the sales process.

What title insurance protects against
Title insurance provides financial insulation from not only the court costs related to issues with the transference of titles, but plenty of other hurdles as well. These challenges include claims by creditors, unexpected heirs trying to lay claim to a property, misinterpretations of wills or trusts, issues with marital status, errors, liens, and so on. Effectively, almost anything that could lead to a dispute in ownership of a property and its permanent structures will be covered by title insurance.

That coverage includes the costs of dealing with these issues in the legal system and potentially even settling claims in certain situations. It's also worth noting that this protection is a one-time cost, rather than a monthly or annual premium, providing an even greater value over a period of what could be years.

What to expect
Often, title insurance costs between $500 and $1,000 or so, but that cost will vary based on both the sales price of the property and the regulations of the state in which it is being sold. Those rules will also dictate who has to actually pay that premium. Real estate professionals typically recommend title insurance to all their clients simply because of the amount of financial protection it can provide if unexpected issues arise, according to Peggy Smith, association executive for the Old Kentucky Home Board, writing for the Kentucky Standard.

The more consumers - whether they're buying or selling - can do to learn about title insurance and the benefits it provides, the better off they will be when it comes to making an informed decision that protects all parties.