Florida homeowners and commercial business owners, when they bought their house or building, may have noticed that they paid a premium for title insurance.

Usually, lenders will require buyers to purchase title insurance. Even when no lender is involved, many people will buy it as a matter of course, treating it almost as just another closing expense.

However, Floridians will start to take their title insurance policy seriously if it should later become evident that the land they bought has some cloud on its title.

Clouds can be something as simple as an unpaid tax lien of a few hundred dollars all the way up to an issue like a recorded easement or deed which effectively makes the land worthless. Unfortunately, fraud related to title is all too common, but title insurance may offer coverage for this as well.

Title insurance will cover many types of title defects. If a person needs to file a claim, the insurance company will either fund appropriate legal action to defend or clear the title or will pay for the owner’s covered losses.

However, it is important to be aware that title insurance does not cover all types of problems with title and will not support all real estate litigation, even when that litigation is necessary.

One common exclusion in a title insurance policy, for example, is an exclusion for when a government uses eminent domain to acquire land it did not already own or have an interest in.

Those in Florida who own land should be aware of how their title insurance can help them protect their investment. However, they should also understand that it does not cover everything, so they may have to evaluate other options in the event of a dispute.