# Title insurance

> Title insurance protects against losses from problems with a property’s ownership history, such as unknown liens, forged signatures or recording errors, that weren’t found before the sale. You pay a one-time premium at closing.

Also called: title policy, owner’s policy, loan policy. Topic: Closing costs and taxes.

Unlike most insurance, title insurance looks backward: it covers problems that already existed when you bought, not future events. A [title search](https://brokerandagent.com/glossary#title-search) catches most issues before [closing](https://brokerandagent.com/glossary#closing), and the policy protects you against covered issues it missed.

## 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](https://brokerandagent.com/glossary#lien), errors in public records, missing heirs who claim an interest, and mistakes in an earlier [deed](https://brokerandagent.com/glossary#deed). If someone challenges your ownership over a covered issue, the insurer defends it or pays the loss, up to the policy amount.

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 policy will exclude.

## What’s the difference between owner’s and lender’s title insurance?

There are two policies. [Lender’s title insurance](https://brokerandagent.com/glossary#lenders-title-insurance) protects the mortgage lender up to the loan balance, and lenders require it. [Owner’s title insurance](https://brokerandagent.com/glossary#owners-title-insurance) protects your own stake for as long as you or your heirs own the home; the CFPB describes it as optional.

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 Florida, it’s $25.

## 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 the purchase price.

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 pay to compare.

## 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 any of these.

## 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, Collier and Sarasota.

## 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 it by custom.

### 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 own the home.

### 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 need another one.

Calculator: [Closing cost calculator](https://brokerandagent.com/tools/closing-cost-calculator)

Data: [Closing costs by state](https://brokerandagent.com/research/closing-costs-by-state)

## Related terms

- [Owner’s title insurance](https://brokerandagent.com/glossary#owners-title-insurance): Owner’s title insurance protects a buyer’s ownership against covered title problems from before the purchase, such as forged documents, unknown liens or public record errors. It costs a one-time premium at closing and lasts as long as you or your heirs own the home.
- [Lender’s title insurance](https://brokerandagent.com/glossary#lenders-title-insurance): Lender’s title insurance protects the mortgage lender, not the buyer, against title problems up to the loan amount. Lenders require it on most home loans, and the buyer usually pays for it at closing.
- [Title search](https://brokerandagent.com/glossary#title-search): A title search is a review of public records on a property, such as deeds, mortgages, liens, judgments and unpaid taxes, to confirm the seller can transfer clear ownership and find anything that must be paid off first.
- [Title company](https://brokerandagent.com/glossary#title-company): A title company researches a property’s title, issues title insurance and, in many states, runs the closing: holding funds in escrow, preparing the settlement statement, paying off liens and recording the deed.
- [Closing costs](https://brokerandagent.com/glossary/closing-costs): Closing costs are the fees and taxes buyers and sellers pay to complete a home sale beyond the price itself, such as lender charges, title insurance, settlement and recording fees and transfer taxes. Who pays which depends on the contract and local custom.

## Sources

- [CFPB: What is owner’s title insurance?](https://www.consumerfinance.gov/ask-cfpb/what-is-owners-title-insurance-en-164/)
- [ALTA Home Closing 101: Protect your property rights](https://www.homeclosing101.org/protect-your-property-rights/)
- [Texas Department of Insurance: Title insurance FAQs](https://www.tdi.texas.gov/title/titlefaqs.html)
- [Texas Department of Insurance: Title insurance rates, 2026](https://www.tdi.texas.gov/title/titlerates2026.html)
- [Florida Administrative Code 69O-186.003: Title insurance rates](https://www.flrules.org/gateway/ruleNo.asp?id=69O-186.003)

Checked 2026-10-02 by the Broker & Agent team. General information, not legal, tax or lending advice.

Source: https://brokerandagent.com/glossary/title-insurance