Title insurance is an indemnity insurance that protects its holder from any loss that arises from defects in the property title. The two type of Boca Raton title insurance found in property transactions are:
Lender’s title insurance: Purchased by the borrower to protect the lender. This type of insurance is usually demanded by the lender to protect their investment.
Owner’s title insurance: Purchased by the seller to protect the buyer.
Why Do You Need Title Insurance?
Property transactions involve a substantial amount of money. Any defects in the title that can arise later may compromise the owner’s claim to the property, causing major financial loss. Title insurance is designed to protect the various parties in a property transaction against these losses.
Liens, outstanding lawsuits, fraud, defects in the title encumbrances, and other defects in a title are what title insurance provides coverage for. While most insurance policies protect the holder in case of a future event like fire, title insurance protects the holder against events that may have occurred in the past, such as an outstanding debt. A title insurance protects both the lender and the property owners.
Is Title Insurance required even if there has been a title search?
Yes. A thorough title search should always be executed prior to purchasing a property. Most title searches will investigate public records;however, it can still miss a claim or dispute. A Boca Raton title insurance ensures that there will be no penalty for missed claims that may resurface at a later time.