Why does the Seller buy Title Insurance?
I’m paying for what? Title Insurance! Why?
Well, it’s ‘normal and customary’ here in South Florida for the Seller to pay for an Owners Title Policy. These policies are far from cheap and the Seller often asks why? Well, it’s for the benefit of both the the Buyer and the Seller. This is an insurance policy standing behind the validity of the Seller’s conveyance of clear title. Good ‘marketable’ (something I can sell) title unencumbered by liens, clouds, errors or omissions. Let’s just say there is no title insurance. A few years go by and the Buyer (the new Owner) gets a notice from a lawyer that they have to pay off a lien, or someone shows up claiming to have an interest in the property but did not receive any money from it. The Owner calls you and if you signed a warranty deed then you defend that claim. Unless there’s a title insurance policy. Then they defend the claim.
