What Does Title Insurance Cover in Florida? Common Risks You Might Miss

Title insurance helps protect your rights as a Florida property owner against past legal issues that may not surface during a standard title search. Many buyers assume everything is clear once the contract is signed, but that’s not always the case. Hidden risks can appear after closing and threaten your ownership. This guide outlines what title insurance actually covers and which issues are often missed until it’s too late.

How Title Insurance Protects Florida Property Buyers

Title insurance covers financial loss due to defects in the property’s title that were unknown at the time of purchase. It also provides legal defense if someone challenges your ownership based on a past issue. This protection applies even years after you’ve closed. In Florida, it’s commonly used to protect against defects missed during the title search. Coverage continues for as long as you or your heirs own the property.

Key protections include:

• Fraudulent transfers

• Clerical errors in public records

• Unknown heirs

• Unpaid liens

What’s the Difference Between Owner’s and Lender’s Title Insurance?

An owner’s policy protects you, the buyer, from financial loss or legal challenges related to your property’s title. A lender’s policy protects the mortgage company’s interest up to the loan amount. Most Florida lenders require a lender’s policy before closing. The owner’s policy is optional but highly recommended. Each serves a different party and lasts for a different period.

Quick comparison:

• Owner’s: covers equity and legal defense

• Lender’s: protects loan only

• Owner’s lasts indefinitely; lender’s ends with payoff

What Risks Are Typically Missed by a Title Search?

While a title search checks public records, some issues don’t appear or are recorded incorrectly. Forged signatures, undisclosed heirs, and misindexed documents can go undetected. Even the most thorough title search has limits. Title insurance fills those gaps. It steps in when issues arise later.

Missed risks may include:

• Forged deeds

• Mistakes in legal descriptions

• Unrecorded easements

• Unknown spousal interests

Does Title Insurance Cover Fraud?

Yes, title insurance typically covers losses due to fraudulent deeds or false documents recorded in the chain of title. If someone impersonates a seller or forges a transfer, your insurer will usually cover legal costs to defend your ownership. These situations are increasingly common in Florida. The policy can also provide reimbursement if your title is invalidated. Fraud-related claims are among the top reasons for using title insurance.

Fraud scenarios include:

• Fake sellers transferring property

• Forged signatures on deeds

• Impersonation of owners

What Liens and Judgments Will Title Insurance Cover?

Title insurance protects against liens or judgments that were not disclosed or recorded properly at the time of closing. These may include past-due taxes, contractor liens, or unresolved debts tied to the property. If you discover a hidden lien after purchase, your insurer may pay for its removal or cover resulting legal costs. However, it must be an issue that predated your purchase and wasn’t disclosed. Known liens disclosed in the title report are typically excluded.

Potentially covered liens:

• IRS tax liens

• HOA fines not recorded properly

• Missed mortgage satisfactions

Are Boundary Disputes and Easements Covered?

Only in certain cases. If a boundary dispute arises from an undiscovered survey error or a recorded easement not disclosed to you, your policy may cover it. However, if the dispute involves physical encroachments visible before closing, it may be excluded. That’s why reviewing the title commitment and obtaining a survey is important. Endorsements can extend coverage to include these risks.

Possible scenarios covered:

• Recorded easements not shown during the transaction

• Property line confusion from outdated legal descriptions

What Isn’t Covered by Title Insurance in Florida?

Title insurance does not cover issues that arise after you purchase the property or risks you were aware of before closing. It also excludes zoning violations, environmental hazards, and property condition problems. Some exclusions may be removed by endorsements. Reviewing your policy with a real estate attorney can help clarify the boundaries of coverage. Understanding what’s excluded is just as important as knowing what’s covered.

Common exclusions:

• Known title defects disclosed before closing

• Government claims not recorded publicly

• Encroachments visible but not surveyed

How Long Does Title Insurance Last?

An owner’s policy lasts as long as you or your heirs hold an interest in the property. It does not expire and requires no annual renewal. This lifetime coverage is part of what makes the one-time premium worthwhile. The lender’s policy, by contrast, ends when the loan is paid in full. The policies serve different durations because they protect different interests.

Coverage timeline:

• Owner’s: until property is sold or transferred

• Lender’s: until mortgage is satisfied

How to Make a Claim on Your Title Insurance

If you discover a covered title defect, notify your insurer in writing as soon as possible. The company will investigate the issue and determine if it’s covered under your policy. If it qualifies, they may provide legal representation or pay for damages. Delays in reporting can complicate resolution. Having an attorney assist with filing can ensure the process runs smoothly.

Steps to follow:

1. Contact your title insurance company
2. Provide documentation of the issue
3. Await claim review
4. Follow up regularly

FAQs: What Does Title Insurance Cover in Florida? Common Risks You Might Miss

What exactly does title insurance cover in Florida?

Title insurance protects against past title issues that weren’t discovered during a title search. These include forged deeds, misfiled documents, unpaid liens, and unknown heirs. It also covers legal defense costs if your ownership is challenged.

Does title insurance cover problems found after closing?

Yes, title insurance covers hidden defects that existed before you bought the property but surfaced later. This includes fraud, errors in public records, or undisclosed liens. The policy activates once you take ownership and continues indefinitely.

Will title insurance protect me from forged deeds?

Yes, forged deeds are one of the most common covered risks. If someone fraudulently transferred the property before you bought it, your policy will help defend your title. The insurer may pay legal costs or compensate you if ownership is invalidated.

Can title insurance cover unpaid property taxes?

Title insurance covers unpaid taxes if they weren’t discovered or properly recorded at the time of closing. If a lien surfaces after the purchase, your policy can help resolve it. Known tax debts disclosed before closing are usually excluded.

Are boundary disputes covered by title insurance?

Sometimes. If the dispute involves errors in the legal description or a hidden recorded easement, you may be covered. However, visible encroachments or disputes that could’ve been discovered by a survey are often excluded.

What’s not included in a Florida title insurance policy?

It doesn’t cover issues you were aware of before closing, zoning violations, or problems related to the property’s physical condition. It also excludes future claims not tied to the title’s history. Some exclusions can be addressed with endorsements.

How long does an owner’s title insurance policy last?

An owner’s policy lasts as long as you own the property and can extend to your heirs. It’s a one-time purchase that doesn’t require renewal. Coverage ends only when the property changes ownership.

Does lender’s title insurance protect me as a buyer?

No, the lender’s policy only protects the bank’s interest in the loan amount. To protect your equity and ownership, you’ll need a separate owner’s title insurance policy. Both policies are typically issued at the same time.

How do I file a title insurance claim in Florida?

Contact your title insurer in writing with a description of the issue and any supporting documents. They’ll review your policy and investigate the claim. If it’s covered, the insurer may pay legal costs or settle the dispute.