If you’re financing a home in Florida, your closing statement will usually list two title insurance policies: an owner’s policy and a lender’s policy. They sound alike, they’re issued at the same closing, and they protect against the same kinds of title problems. But they protect different people, and only one of them protects you.
The short answer
A lender’s policy protects your mortgage lender, up to the loan amount, and ends when the loan is paid off. An owner’s policy protects you, for the full purchase price, for as long as you own the home. Your lender requires the first. The second is optional, and it’s the only one that protects your equity.
Owner’s vs. lender’s title insurance at a glance
| Owner’s policy | Lender’s policy | |
|---|---|---|
| Who it protects | You, the buyer | Your mortgage lender |
| Coverage amount | The full purchase price | The loan amount |
| How long it lasts | As long as you own the property | Until the loan is paid off or refinanced |
| Required? | Optional | Required by mortgage lenders |
| Cost in Florida | State-set rate on the purchase price | $25 when issued with an owner’s policy; full rate if bought alone |
| Who usually pays | Buyer in Broward and Miami-Dade; seller in Palm Beach | Buyer |
What both policies cover
Both policies cover title problems that existed before you closed but weren’t caught, such as:
- Forged signatures or fraudulent deeds in the property’s history
- Errors in public records, including mistakes in legal descriptions
- Heirs or former spouses who later claim an ownership interest
- Liens or judgments against a prior owner that were missed
The difference is who gets paid and defended. If a covered claim comes up, a lender’s policy pays the lender. An owner’s policy pays your covered losses and pays to defend your title in court.
What it costs in Florida
Florida sets title insurance premiums by rule (Fla. Admin. Code R. 69O-186.003), so every title company charges the same premium. The owner’s policy is priced on the purchase price: $5.75 per $1,000 for the first $100,000 and $5.00 per $1,000 from $100,000 to $1 million, with lower rates above that. When the lender’s policy is issued at the same closing, it costs a flat $25 for coverage up to the purchase price.
Here’s what that looks like on a $400,000 purchase with a $320,000 loan:
- Owner’s policy: $2,075
- Lender’s policy issued with it: $25
- Total: $2,100
Now the part most buyers don’t expect. If you skip the owner’s policy, the lender’s policy is no longer $25. Issued on its own, it’s priced at the full rate on the loan amount: $1,675. In this example, owner’s coverage on your full purchase price costs only $425 more than going without it.
Want your own numbers? Our Florida closing cost calculator estimates both premiums plus doc stamps and intangible tax in about 30 seconds. Endorsements and settlement fees are separate.
Who pays for each policy in South Florida
The buyer pays for the lender’s policy, since it’s a condition of the loan. Who pays for the owner’s policy depends on local custom and, ultimately, your contract. In Broward and Miami-Dade, the buyer customarily pays. In Palm Beach County, the seller customarily pays.
What happens when you refinance
A refinance creates a new loan, so your new lender will require a new lender’s policy. Your existing owner’s policy stays in force; you don’t buy it again. If the prior policy on the property was issued less than three years earlier, Florida’s lower reissue rate can apply. On a $320,000 refinance, that’s $990 instead of $1,675.
Should you buy an owner’s policy?
A lender’s policy won’t pay you anything. If a forged deed or a missed lien surfaces after closing, the lender is protected up to its loan balance, and your down payment and equity are not. For a one-time premium at closing, often only a few hundred dollars more than the lender’s policy you’re already paying for, an owner’s policy closes that gap. New to the subject? Start with what title insurance is and why you need it in Florida.
Frequently asked questions
Is owner’s title insurance required in Florida?
No. Your mortgage lender will require a lender’s policy, but the owner’s policy is your choice.
Do I pay for title insurance every year?
No. Both policies are paid once, at closing.
Does the lender’s policy protect me?
No. It protects the lender’s interest in the property, up to the loan balance. Only an owner’s policy protects you.
Is the premium different at different title companies?
No. Florida sets the premium, so it’s the same everywhere. What differs is the service around it: how fast the title search comes back, who answers the phone and whether your closing happens on time.
Neither policy covers everything. Standard owner’s policies generally exclude building and zoning matters, which is why open permits and city liens need their own check. See our guide to open permits and municipal liens in South Florida.
Questions about your closing?
Call (305) 603-8393 and Luis or Yeni will walk you through it, or send us your contract for an exact quote. You can also browse our title services and FAQs.
