Understanding Title Insurance for New Construction Homes

When building a home in Southwest Florida, understanding the nuances of title insurance is crucial. Title insurance offers unique protections and involves specific considerations for new construction homes, differing slightly from title insurance for existing homes. 

What Is Title Insurance? 

Title insurance is a type of insurance policy that protects homebuyers and lenders from financial losses due to issues with the ownership of a property. These issues, or “defects,” can include unpaid debts, errors in public records, or other problems that might affect who actually owns the property. Unlike other types of insurance that protect against future events, title insurance protects against things that happened in the past but could cause trouble now. Once you have a title insurance policy, it covers you for as long as you own the home. 

Title insurance is essential when you’re building on land you already own, as it ensures that your property is free from any pre-existing liens or claims that could affect your ownership. 

Lender’s Title Insurance and Owner’s Title Insurance 

If you’re constructing a home on land you own, lender’s title insurance is required by your mortgage provider to protect their financial interest against any title issues. This policy doesn’t protect you as the homeowner. 

Owner’s title insurance, on the other hand, safeguards your investment. It covers potential problems such as claims of unpaid contractor bills or property boundary disputes that can arise during construction. It’s not required, but heavily encouraged, and you can sometimes get a slight discount if purchased together with lender’s title insurance. 

You will also get a discount (re-issue credit) by providing a copy of your owner’s title insurance policy from when you purchased the vacant lot. 

Contractor’s Final Affidavit 

For new homes, the title company will require a CFA (contractor’s final affidavit). This document confirms that the builder has paid everyone who worked on the home, such as subcontractors and suppliers. This helps ensure there are no outstanding bills that could become your problem later. 


Additional endorsements might be required by your lender for a lender’s title insurance policy on a new construction home. These endorsements provide extra layers of protection. 


A boundary survey is required to confirm that the home is built within property boundaries and to check for any encroachments or easements. This ensures that the property boundaries are clear and undisputed, preventing future legal issues. A final survey will be completed once all construction is complete. The final survey certifies construction was performed in accordance with design plans and specifications. 


At Hyperion Title, we take pride in partnering with new construction builders like Sposen Signature Homes to provide top-notch title insurance services for new construction projects. Among our many other services, our team specializes in the unique requirements of title insurance for newly built homes, ensuring that every buyer is fully protected against any potential title issues. With our thorough understanding of the intricacies involved in new construction, we work diligently to secure your investment and provide you with peace of mind. Trust Hyperion Title to guide you through a smooth and secure closing experience.