Title insurance is insurance of owners of real property or others having an interest in real property that protects against financial, or economic, loss due to defects, or invalidity, of title to real property, including invalidity or unenforceability of mortgage liens.

Title insurance is defined by s. 624.608, F.S., as “insurance of owners of real property or others having an interest in real property or contractual interest derived therefrom, or liens or encumbrances on real property, against loss by encumbrance, or defective titles, or invalidity, or adverse claim to title.” Title insurance is a policy issued by a title insurer that, after performing a search of the title, represents the state of that title and insures the accuracy of its search against claims of title defects.

Title insurance is usually purchased when title to real property is conveyed from one party to another. Lenders usually require it as a condition of loaning money for the purpose of securing their lien(s) on the real property. The borrower customarily pays for the lender’s policy. Who pays for the owner’s title insurance policy (or any portion thereof, including related title services) usually depends on the location (i.e., county) of the real property. Although the allocation of costs involved in any real estate transaction are negotiable, local custom strongly influences which party, buyer or seller, pays for both the owners and lenders title insurance policy, including related charges.

In Florida, the premium charged for title insurance includes a charge for the performance of primary title services. 

"Primary title services” means determining insurability in accordance with sound underwriting practices based upon evaluation of a reasonable title search or a search of the records of a Uniform Commercial Code filing office and such other information as may be necessary, determination and clearance of underwriting objections and requirements to eliminate risk, preparation and issuance of a title insurance commitment setting forth the requirements to insure, and preparation and issuance of the policy. Such services do not include closing services or title searches, for which a separate charge or separate charges may be made.

Since the charge for the performance of primary title services is wrapped within the premium charge, it is an integral component of the total charge. The title insurer must receive at least 30% of the promulgated rate. This is to cover the risks incident to the issuance of such policy (i.e., insurer solvency). The promulgated premium rate, however, is split 70%/30% between underwriter and agent.