Florida Title Insurance Services /

Why Have Title Insurance with Equitable

History of Title Insurance

The title insurance industry traces its roots back to the 1850's, when early court decisions were being made regarding the liability of title opinions made from researching public records.

These early court decisions held that attorneys were liable only if they could be proven negligent in preparing and giving their opinion and that, even if so liable, damages were often limited to the amount paid for the title opinion.

Therefore, in response to these early hallmark cases, title insurance was created to fulfill the unmet need for reliable assurance of title and indemnification of loss caused by errors in reporting the status of title. 

In 1874, Pennsylvania enacted the first statutes authorizing the issuance of title insurance. The Lawyers' Title Insurance Corporation was formed under that enabling legislation in 1876 and during the following ten years, title insurance companies were established in many major East Coast cities, including New York City, Philadelphia, Baltimore and Washington, D. C.

The introduction of title insurance was not just a new phenomenon in the United States, but also the world, and has the unique distinction of being the only form of insurance invented in the United States. 
Historically the title insurance industry had to overcome turbulent times; however, between the First and Second World Wars the title insurance industry began to create a national market for their policies and title insurance became the preferred method of title protection. By 1940, title insurance was the predominate form of title assurance on residential transactions in most urban areas and throughout many regions. Residential and commercial title insurance is now readily available in nearly every market and is regulated at the state level. The title insurance industry in Texas is among the most regulated and restrictive in the nation 

Title Insurance In Florida

In Florida, title insurers and agents differ from one another almost entirely in quality of service. Premiums are uniform from company to company and are promulgated by the Commissioner of Insurance of the State of Florida based on the sale value or loan amount of the property to be insured. The full premium is payable at closing, and the owner policy is good for as long as the insured owns the property. A mortgagee policy remains in effect for the life of the loan. In the event the loan is refinanced, the lender will normally require a new policy, but the borrower will receive a premium discount if the refinance occurs within seven years from the date of the original mortgagee policy. 

The Protections of Title Insurance 

A title insurance policy protects the named insured against unknown title defects, liens and encumbrances existing as of the date of the policy. For a one-time premium, the policy remains in effect until the property is sold or refinanced and, in the case of warrantor's coverage in Florida continues to protect the seller without a limitation of time. The two prominent types of title policies in Florida are "mortgagee policies," which protect lenders, and "owner policies," which protect buyers. 

The mortgagee policy protects the lender against loss due to unknown title defects and will repay the balance of the mortgage if a claim against the property voids the title. Mortgagee policies remain in effect until the loan is fully repaid. This policy, however, only protects the lender's interest and offers no protection for the buyer. To obtain similar protection, a buyer must obtain an owner policy, which insures the property against the specific kinds of claims listed in the policy. For a predetermined premium, a title company will automatically issue an owner policy when a mortgagee policy has been purchased, unless owner coverage is specifically rejected in writing. An owner policy will remain in effect as long as a person or their heirs own the property or are liable for any title warranties made when the property is sold. 

A commitment for title insurance is issued after a careful examination of documents recorded in the public records. However, even the most thorough search cannot absolutely assure that no title hazards are present, despite the knowledge and experience of professional title examiners. In addition to matters shown by public records, other title problems may exist that cannot be disclosed in a search. The list below outlines a few of the more common defects that can cause loss of title or create an encumbrance on title and are covered by title insurance: