Title insurance offers a layer of financial protection when defects arise concerning the property’s title, such as unresolved mortgages, liens and other legal action involving the land. Most property buyers treat it as another requirement usually included when closing a real estate purchase. Once the owner obtains it as a requirement, they might not bother going back to update it unless they need to.
However, you should consider updating or even increasing your title insurance coverage, especially for commercial properties in Florida. Title insurance policies indicate coverage limits based on the property’s value during closing. If an owner doesn’t increase their coverage when the property’s value exceeds the policy limit, it might lead to becoming underinsured.
If title insurance cannot cover the property’s present value, the owner could lose protection from title defects or claims. It is also notable how fast commercial property value can increase over time, especially when land improvements have occurred since the purchase. If you bought the property a decade ago, it might be best to review its title insurance policy.
Increasing title insurance coverage for protection
Fortunately, it is not too late to update your title insurance and add coverage. If you plan to do so, you might need to obtain a copy of the title insurance policy and meet other requirements to help determine the property’s current market value. You might also need a title search to check for issues and discrepancies.
After determining these details, you could receive the appropriate premium for the coverage increase. Other requirements may also apply based on the situation. In these cases, it might be beneficial to consult an attorney, especially if you detect any issues with the property or its title.