When may a loan policy be converted to an owner's policy?

A loan policy, often referred to as a lender's policy, specifically protects the lender's interest in the property until the loan is paid off. This type of policy is tailored for the benefit of the lender and covers the amount of the loan. In contrast, an owner's policy is designed to protect the buyer's or homeowner's equity in the property.

The important distinction here is that a loan policy cannot be converted into an owner's policy. While it might seem appealing to think that such a conversion could occur to offer the prospective homeowner some protection, title insurance policies operate independently based on the specific interests and risks related to the lender and the homeowner. Therefore, they serve different purposes and cannot change from one type to another after issuance.

Decisions made by insurance companies regarding title insurance policies involve regulations and statutory frameworks that dictate such policies' terms. In the case of a loan policy transitioning to an owner's policy, the insurable interest and coverage scope differ greatly, which is why conversion is not permissible.

To elaborate on the other answer options, converting a loan policy to an owner's policy at any time, only at closing, or after a year is not a provision supported by the regulatory framework governing title insurance in Florida. The protections offered by each type of policy