Title insurance is one of the most important protections in a real estate transaction — and one of the least understood. In Florida, the rules around who pays and what's covered differ from many other states.
What Is Title Insurance?
Title insurance protects against financial loss from defects in the title to a property. Unlike most insurance (which protects against future events), title insurance protects against past events — problems in the chain of ownership that existed before you bought the property.
Title defects can include: unpaid liens, outstanding mortgages, forged deeds, errors in public records, undisclosed heirs claiming ownership, encroachments, easements, and fraud. Without title insurance, discovering a lien or ownership claim after closing could be financially devastating.
Two Types of Title Insurance Policies
Owner's Title Insurance Policy
Protects the buyer. If a covered title defect is discovered after closing, the title insurance company pays to defend your ownership and compensates you for covered losses up to the policy amount (the purchase price). An owner's policy lasts as long as you or your heirs own the property.
Lender's Title Insurance Policy
Protects the mortgage lender. Required by virtually all lenders as a condition of funding your loan. It covers the lender's interest — the outstanding loan balance — not the buyer's equity. The lender's policy decreases as you pay down the mortgage and expires when the loan is paid off.
Important: a lender's policy provides no protection to the buyer. If you're financing, you need both policies.
Who Pays for Title Insurance in Florida?
This varies by county in Florida — which surprises many buyers coming from other states where the buyer pays for everything.
- Broward, Palm Beach, and most of Florida: It is customary for the seller to pay for the owner's title insurance policy. This is not a legal requirement — it's a market custom — but it is standard practice in most Broward County transactions.
- Miami-Dade County: The buyer typically pays for title insurance.
- Lender's policy: In most cases, the buyer pays for the lender's title insurance policy.
These customs can always be negotiated in the contract — the key is to clarify who pays in the purchase agreement.
How Much Does Title Insurance Cost in Florida?
Florida's title insurance rates are promulgated (set) by the state — all title companies charge the same base rate. The rate is based on the purchase price. As a general guide:
- $100,000 purchase: approximately $575
- $300,000 purchase: approximately $1,575
- $500,000 purchase: approximately $2,575
- $1,000,000 purchase: approximately $5,075
These are one-time premiums paid at closing. There are no annual renewal fees.
If an owner's and lender's policy are issued simultaneously (which is almost always the case), you receive a discount on the lender's policy premium — typically reducing it to approximately $25 to $100.
Title Search vs. Title Insurance
A title search reviews public records to identify any issues with the chain of ownership. Title insurance covers losses despite the title search — it protects against things the search might miss (clerical errors, fraud, forgeries, undiscovered heirs) and pays for legal defense if your title is challenged.