Title insurance protects against problems with the home’s ownership history that a title search missed, like an old lien, a forged signature, an unknown heir or a recording error. There are two policies: a lender’s policy, which your lender requires, and an owner’s policy, which protects you and is usually optional. Both are paid once, at closing.
Lender’s vs. owner’s policy
| Lender’s policy | Owner’s policy | |
|---|---|---|
| Protects | The lender, up to the loan amount | You, up to the purchase price |
| Required? | Yes, with a mortgage | Usually optional |
| Lasts | Until the loan is paid off | As long as you or your heirs own the home |
| Who pays | Usually the buyer | Buyer or seller, depending on local custom |
What it covers
- Unpaid taxes, contractor liens or judgments against past owners.
- Forgery and fraud in past transfers.
- Errors in public records.
- Claims by unknown heirs.
- Boundary and easement issues, depending on the policy.
It covers problems from before you bought, not new ones you create later.
Is an owner’s policy worth it?
It’s a one-time cost, often a few hundred to a couple of thousand dollars, buying “simultaneous issue” coverage alongside the lender’s policy is usually discounted, and it protects what is likely your largest asset. Most buyers buy it unless the seller pays for it by local custom.
Try it: Closing cost estimatorSee title costs and who usually pays them in your state, along with your other closing costs.How to save
- Shop title and settlement services if your Loan Estimate lists them as shoppable (Section C); some states set title rates by law.
- Ask about a reissue discount if the home was insured recently.
- Compare closing costs by state on closing costs by state.
Common questions
Is owner’s title insurance required?
Usually not; the lender’s policy is required, the owner’s policy is optional but recommended.
How much does title insurance cost?
It varies by state and price; the owner’s policy is a one-time cost, often a few hundred to a couple of thousand dollars.
Who pays for title insurance?
It depends on local custom; in some areas the seller pays for the owner’s policy.
Updated October 2026. Educational content. OfferBacked is not currently a lender and doesn’t issue pre-approvals or loans.