The owner's Title Insurance Policy protects you from defects that might exist in the Title prior to the issue date of the policy. Such defects might include the following:
1. Errors in public records
2. Unknown Liens
3. Missing Heirs
4 .Forgeries
5. Survey or boundary issues
The insurance pays for the defense of any claim and/or lawsuit attacking the title as insured, and will either clear up the title problems or pay the insured's losses.
For a one-time premium, the Owner's Title Insurance Policy remains in effect as long as the insured, or the insured's heirs, retain an interest in the property, or have obligations under a warranty in any conveyance.
The contract should always stipulate who pays for the Florida title insurance. In Florida it is more important than anywhere else for the contract to mention it. This is due to conflicting local customs. There are many areas of Florida where it is customary for the Seller to pay for the title insurance policy.
In the two most heavily populated counties Miami-Dade County and Broward County, Buyers typically cover the cost of Florida title insurance. (Of course there are exceptions, for example with bank owned properties it is very typical for the bank to control and pay for title insurance) However if you travel a bit north to the 3rd most populated region of Florida, Palm Beach County, it is very typical for Sellers to pay for the cost of title insurance.
It is important to note that even when the seller pays for the title insurance it is still the buyers choice of which Florida Title Company.
NOTE: "Section 9 of RESPA prohibits a seller from requiring the home buyer to use a particular title insurance company, either directly or indirectly, as a condition of sale. Buyers may sue a seller who violates this provision for an amount equal to three times all charges made for the title insurance."
When pricing out a transaction in Florida as a buyer, seller, realtor or bank always make sure you read the purchase agreement. As a buyer it is a good idea to consult with an attorney prior to finalizing your agreement. No matter what is customary or “normal,” the payment of title insurance in Florida is negotiable and should always be decided in the agreement of sale.
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