Owner's Title Insurance Policy Information
The owner's policy protects against: unknown liens (mortgages, judgment liens, and tax liens that were not discovered during the title search), forged or fraudulent documents in the chain of title, errors in the public records (incorrect indexing, missing documents, and clerical mistakes), unknown heirs or missing parties (persons with claims to the property who were not identified), boundary disputes and survey errors, and easements and restrictions that were not disclosed. The owner's policy is: issued for the full purchase price (the coverage increases if the property appreciates; enhanced policies provide inflation protection), effective for as long as the owner (or their heirs) has an interest in the property, and purchased once with a single premium (no ongoing premiums or renewals).
Florida Legal Definition
Owner's title insurance in Florida is governed by: Florida Statutes Chapter 627, Part XI (Title Insurance), ALTA policy forms, and the OIR-promulgated rates. Under Florida law: the owner's policy premium is promulgated (set by the OIR; the rates are not negotiable), the premium is based on the purchase price (higher values = higher premiums), and the policy may include endorsements (providing additional coverage for: zoning, access, survey, environmental liens, and other specific risks). Under Florida practice: the seller typically selects the title company (in some counties; in others, the buyer selects), the seller typically pays for the owner's policy (though this is negotiable and varies by county custom), and the simultaneous issue discount applies to the loan policy (when both policies are issued together). Under ยง627.7843, the title agent must conduct a title search and examination before issuing the commitment.
How It's Used in Practice
In practice, attorneys advise buyers to purchase owner's title insurance. The attorney: explains the coverage (protecting against title defects that may not be discoverable through a title search), reviews the commitment and Schedule B exceptions (ensuring the policy will provide adequate coverage), requests deletion of standard exceptions (by providing a current survey and owner's affidavit), requests endorsements for specific risks (zoning, access, survey, and environmental), and coordinates the policy issuance with the title company. Common issues include: buyers who decline owner's title insurance to save money (a risky decision that could result in significant uninsured losses), title defects discovered after closing (which would be covered by the owner's policy but not by the loan policy), and the distinction between the owner's and loan policies (the loan policy protects only the lender; the owner's policy protects the buyer).
Key Takeaways
- Owner's policy protects BUYER against title defects.
- Optional but strongly recommended; covers title risks not in title search.
- Florida premiums set by OIR; not negotiable.
- Coverage lasts as long as owner has interest; enhanced policies adjust for inflation.
- Request: exception deletions and endorsements for specific risks.
Disclaimer: The information and opinions provided are for general educational, informational or entertainment purposes only and should not be construed as legal advice or a substitute for consultation with a qualified attorney. Any information that you read does not create an attorney–client relationship with Barnes Walker, Goethe, Perron, Shea & Johnson, PLLC, or any of its attorneys. Because laws, regulations, and court interpretations may change over time, the definitions and explanations provided here may not reflect the most current legal standards. The application of law varies depending on your particular facts and jurisdiction. For advice regarding your specific situation, please contact one of our Florida attorneys for personalized guidance.
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