What Is Title Insurance?

Title insurance
Title insurance is a necessity and we explain what it is.

If you have ever purchased a home, then you have likely purchased title insurance. As with any insurance, title insurance protects against loss. In a nutshell, this type of insurance protects against unforeseen risks related to the property’s past that could threaten the ownership of the property. These protections extend to ownership claims on a portion or all of a property that may not be documented in the public record. In other words, title insurance protects both home buyers and mortgage lenders in the event of a problem with the title that causes a financial loss. 

Types of title insurance

There are two types of title insurance:

  • Lender’s title insurance: this type of title insurance protects the lender, although the buyer pays for it.
  • Owner’s title insurance: this type of title insurance protects the buyer and is an optional expense. This can be paid as part of the closings costs.

How does title insurance work?

Before a change in ownership for a real estate property can occur, there must be a clear title on the property. Typically, title companies will run various public searches on a property in order to determine if there are any claims on the property. In addition to confirming the seller’s ownership of the property, these searches will look for claims or liens on the property, building code violations, or other issues that could stop the title from being clean. It is important to note that claims can also be made on a property for liens, back tax assessments, easements, lines of credit, or disputed wills. Overall, title insurance covers buyers and lenders for the following:

  • Ownership claims from another party
  • Errors in the records
  • Forgery or fraud in documents
  • Judgments against the property, like liens and lawsuits
  • Unrecorded easements and covenants that could restrict use


Title insurance costs can vary from several hundred dollars to several thousand dollars. With this said, if you do not have this type of insurance and there is a defect with the title, this could result in a significant financial loss for you and your lender. Furthermore, title insurance will protect you for as long as you own the house.

Are you ready to buy a home in South Florida? We can help! Contact Natasha at Live South Florida Realty, Inc. today! Also, don’t forget to download our free Florida Home Search app for your mobile device!

By natasha moore

REALTOR® with Live South Florida Realty, Inc.