Unlike most insurance, title insurance looks backward: it covers problems that already existed when you bought, not future events. A title search catches most issues before closing, and the policy protects you against covered
What does title insurance cover?
A policy covers losses and legal costs from covered defects in the title, such as forged or improperly signed documents, unknown liens, errors in public records, missing heirs who claim an interest, and mistakes in an earlier deed. If someone challenges your ownership over a covered issue, the insurer defends it or pays the loss, up to
It doesn’t cover problems that arise after you buy, or the exceptions the policy lists, such as recorded easements. Read the title commitment you receive before closing; it shows what the
What’s the difference between owner’s and lender’s title insurance?
There are two policies. Lender’s title insurance protects the mortgage lender up to the loan balance, and lenders require it. Owner’s title insurance protects your own stake for as long as you or your heirs own the home; the CFPB describes
Buying both from the same company at the same time usually costs less. In Texas, a lender’s policy issued along with the owner’s policy is a flat $100; in
How much does title insurance cost?
You pay a one-time premium at closing, based on the price or the loan amount. The American Land Title Association puts a typical owner’s premium at about one-half to one percent of
A few states set the premium themselves, so it doesn’t change from one company to the next. Florida and Texas both do: on a $400,000 home, Florida’s owner’s premium is $2,075 and Texas’s is $2,262. Where companies set their own rates, it can
Who pays for title insurance?
It depends on the state and sometimes the county. Sellers customarily pay for the owner’s policy in Texas and in most Florida counties; buyers usually pay in New York, Pennsylvania and most of New England. In California, custom differs by region. The buyer almost always pays for the lender’s policy, and the contract can change
Example: title premiums on a $400,000 home
| Florida owner’s policy (state-set rate) | $2,075 |
|---|---|
| Florida lender’s policy issued with it | $25 |
| Texas owner’s policy (rates effective March 1, 2026) | $2,262 |
| Texas lender’s policy issued with it | $100 |
Premiums only: endorsements, the title search and settlement fees are extra. Sellers usually pay the owner’s policy in Texas and in most Florida counties, but buyers usually pay it in Miami-Dade, Broward,
Common mistakes
- Skipping the owner’s policy because the lender already requires title insurance. The lender’s policy protects
only the lender. - Assuming title insurance covers future problems, like a new boundary dispute. It covers defects from
before you bought. - Not reading the title commitment’s
exceptions before closing.
Questions
Is owner’s title insurance required?
Usually not. Lenders require a lender’s policy, but the owner’s policy is your choice, and in many areas the seller pays for
Do I pay for title insurance every year?
No. It’s a one-time premium paid at closing, and an owner’s policy lasts as long as you or your heirs
Do I need new title insurance when I refinance?
Your new lender will usually require a new lender’s policy. Your owner’s policy stays in force, so you don’t
Sources
- CFPB: What is owner’s title insurance?
- ALTA Home Closing 101: Protect your property rights
- Texas Department of Insurance: Title insurance FAQs
- Texas Department of Insurance: Title insurance rates, 2026
- Florida Administrative Code 69O-186.003: Title insurance rates
Written and checked by the Broker & Agent team on October 2, 2026. General information, not legal, tax or lending advice. Something out of date? Tell us.