What is Title Insurance and who pays?

Title insurance is a form of indemnity which insures against financial loss from defects in title to real property and from the invalidity or unenforceability of mortgage liens. It is meant to protect an owner's or a lender's financial interest in real property against loss due to title defects, liens or other matters. It will defend against a lawsuit attacking the title as it is insured, or reimburse the insured for the actual monetary loss incurred, up to the dollar amount of insurance provided by the policy. Typically the real property interests insured are fee simple ownership or a mortgage. However, title insurance can be purchased to insure any interest in real property, including an easement, lease or life estate.

There are two types of policies - owner and loan. Just as lenders require fire insurance and other types of insurance coverage to protect their investment, nearly all institutional lenders also require title insurance [a loan policy] to protect their interest in the collateral of loans secured by real estate. Some mortgage lenders, especially non-institutional lenders, may not require title insurance. Buyers purchasing properties for cash or with a mortgage lender often want title insurance [an owner policy] as well. A loan policy provides no coverage or benefit for the buyer/owner and so the decision to purchase an owner policy is independent of the lender's decision to require a loan policy.

In Sarasota County, typically, the Buyer purchases their own Title Insurance Policy and in Manatee County, the Seller purchases the policy for the Buyers. To calculate the Owner's Title Policy Insurance cost: $5.75 per thousand for the 1st $100,000, $5.00 per thousand up to $1,00,000 & $2.50 per thousand up to $5,000,000

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