Title insurance protects the home owner and/or a lender (if there is a loan outstanding on the property) against any title defect or dispute that may arise. Lenders require title insurance to close on your home, but if you pay cash you don’t have to purchase title insurance – although we do not recommend that.
Who should get title insurance?
Everyone. Title insurance is important because the title insurance company insures that you have clear title to the property. If there are any problems later, you can always go back to the title insurance company and have them clear it up. Short sales and distressed properties are fought with liens and encumbrances that could come back to haunt you if you don’t have a owner’s title insurance policy.
In Naples, Florida and Collier County, the buyer typically pays for title insurance and is able to chose the title insurance provider. The seller is responsible for providing a copy of his current title policy. This is the standard but make sure you check your written contract for the terms of your transaction. If you have any questions, you should consult a qualified real estate attorney.