Types of Title Insurance Policies

August 20, 2025

The process of buying a new house is stressful enough without going into the risks of a faulty title. Some homeowners might feel that title insurance is not needed, but most people agree that it's the best way to ensure that years' worth of savings don't go to waste.

Title insurance helps owners and lenders protect their investment and deal with any unforeseen circumstances, like liens, errors in the title, ownership disputes, etc.

Today, we'll explore the importance of the two main types of insurance policies while outlining their differences and the protection they provide.

What Is Title Insurance?

First, let's quickly go over what a title is. Title refers to legal ownership over a property. During a closing, the seller signs the property over to the buyer in a document known as the property deed.

As defined by the Florida Department of Financial Services, title is the foundation of real estate ownership and refers to your legal right to own, use, control, possess or dispose of the home.

Title insurance is a contractual agreement that will protect those legal rights you have as the property owner against any unknown or undisclosed issues that might arise from the real estate transaction and jeopardize your ownership and the lender's interest. Its protection can also be tailored to lenders, and this is where we get into the different types of title insurance policies.

Types of Insurance Policies

Homeowner's Insurance Policy: An owner's policy serves to protect the owner from any problem that might affect their rights over the property after the closing is complete. The coverage listed in the policy may vary depending on local laws, conditions, exclusions, and specific terms. Still, it traditionally includes the most common aspects that come into discussion when we talk about the validity of a property title. Moreover, its protection lasts for as long as you have ownership rights over the property.

A premium policy involving a one-time fee usually protects against liens, undisclosed heirs, errors on the title and other property records, instances of fraud, illegal deeds, and other undiscovered encumbrances.

You need to review the policy's coverage carefully beforehand. On top of helping you find a reliable insurance company near you, your lawyer and real estate agent can also help you decide if a specific insurance plan is beneficial depending on its cost, its clauses, etc.

Should I get homeowner's insurance? We definitely recommend that you get this type of insurance. This is the surest way of protecting your investment, not only the costs of the purchase but any renovations you plan to make over the years.

Lender's Insurance Policy: Also known as a loan or mortgage policy, it protects the lender from losses and damages included in the owner's policy, but also from those caused by omissions that might put the lender second in line as a creditor. It prevents financial losses for the bank or lending institution after they've put into the loan. For instance, if a bank loans you $100,000.00 for your property, it means that the policy will be issued for $100,000.00.

Unlike the owner's insurance policy, lender's insurance lasts until the loan is repaid or when a new loan is required, such as when the property goes through refinancing.

Should I get lender's insurance? Purchasing a lender's policy is a common prerequisite that most lending institutions ask for before giving out the loan. It's usually issued with standard terms and conditions approved by the American Land Title Association (ATLA).

Looking for Title Insurance?

If you're buying a new house in Florida or want to upgrade your insurance policy, Key Title & Escrow can introduce the best options to protect your investment. Our specialists are ready to assist you, providing decades of combined experience and all the efficiency you need to save time along the way.

Don't hesitate to call (305) 235-4571 or toll-free at (800) 547-0006 if you want to keep your transaction on the right track. And remember that you can also use the contact form on this page to clear any doubts. We have the most knowledgeable escrow experts on board, and our team is always ready to provide the best assistance.