What you are buying, who it protects, how the price is set in your state, and the questions that save real money. No title company to sell you, just the facts.
1. The basics
What title insurance actually covers
Most insurance protects you from something that might happen. Title insurance protects you from something that already happened: a forged signature in the chain of ownership, an heir who never signed off, a contractor’s lien that was never released, or a clerk’s recording error.
Before closing, a title company searches the public records and clears what it finds. The policy then pays covered losses from anything the search missed, up to the policy amount. You pay once, at closing.
Covered (typically): forgery and fraud, undisclosed heirs, unpaid liens missed by the search, errors in public records, defective deeds.
Not covered: anything listed as an exception in Schedule B, problems you created or knew about, and events after the policy date.
2. Owner’s vs. lender’s
Two policies, two different people protected
The lender’s policy protects the lender’s lien up to the loan amount, and its coverage shrinks as you pay the loan down. Nearly every lender requires one, and the borrower usually pays for it.
The owner’s policy protects you, usually up to the purchase price, for as long as you or your heirs own the home. It is optional in most places. Without it, a covered title problem is your loss even though the lender is protected.
Bought together on a purchase, the lender’s policy is only a small add-on (simultaneous issue). That is why skipping the owner’s policy rarely saves as much as it seems.
Loan Estimate quirk
Your Loan Estimate lists the lender’s policy at its full stand-alone price and reduces the owner’s policy line in Section H by the same amount. Add the two lines together to see the real cost.
3. How premiums are set
Three pricing systems, depending on your state
State-set (promulgated) premiums: Texas, Florida, and New Mexico publish the premium by rule. Every company must charge the same premium for the same policy, so you compare settlement fees and service instead.
Rating bureaus: in New York, New Jersey, Pennsylvania, Ohio, and Delaware, premiums are filed through a bureau and are close to uniform.
Company-filed rates: in most other states each insurer files its own rates, and premiums and fees can differ by hundreds of dollars. This is where shopping pays the most. Iowa is unique: coverage comes from Iowa Title Guaranty, a state program.
4. Your rights
You can shop. Here is what the law says.
Title and settlement services usually appear in Section C of your Loan Estimate, "Services you can shop for." Your lender must give you a written list of providers for those services.
You can generally choose a qualified company that is not on the list. Under the Real Estate Settlement Procedures Act (RESPA), no one may pay or accept a kickback or referral fee for steering your settlement business, and a seller cannot require you to buy title insurance from a particular company as a condition of the sale.
The trade-off
Fees for services you shop from the lender’s list cannot rise more than 10% in total by closing. Fees from a provider you find yourself have no limit, so get that quote in writing.
5. Savings to ask for
Reissue rates, refinance credits, and simultaneous issue
Texas refinances get a credit on the loan policy under rule R-8: 50% when the current loan policy is 4 years old or less, 25% when it is under 8 years old.
Florida offers reissue rates when the seller’s owner’s policy is under 3 years old, or on a refinance when your owner’s policy insured you.
In most other states insurers file their own reissue and refinance discounts. Ask for them by name and bring a copy of the prior policy.
6. From contract to keys
What the title company does, step by step
Order: your contract and earnest money go to the title or escrow company you choose.
Search and exam: they search ownership, liens, taxes, and judgments, and decide what must be cleared.
Commitment: you receive Schedule A (parties and amounts) and Schedule B (requirements and exceptions). Read the exceptions.
Curative: payoffs, releases, and corrections are handled before closing.
Closing: you sign, funds are verified, and money is disbursed.
Recording and policy: the deed and mortgage are recorded and your owner’s policy is mailed to you, often weeks later.
7. Who pays what
Custom decides, the contract rules
Who pays the owner’s policy, the settlement fee, and the transfer tax is set by local custom, and it differs by state and even by county. In Texas the seller customarily pays the owner’s policy; in many Northeastern states the buyer does.
Custom is only a starting point. Your purchase contract decides, and every item is negotiable.
8. Protect your down payment
Closing wire fraud: the one rule
Criminals hack or impersonate title companies, agents, and lenders, then email convincing wiring instructions. Before you wire anything, call the title company at a number you looked up yourself, not one from the email, and confirm the instructions out loud.
If you think you sent money to the wrong account, call your bank immediately to request a recall and file a report at ic3.gov.
Ready to run your numbers? It takes a minute.
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Insurance against losses from ownership problems that existed before you closed: forged deeds, unknown heirs, missed liens, and public-record errors. One premium, paid at closing.
Owner’s Title Policy
Protects your equity, usually up to the purchase price, for as long as you or your heirs own the home. Optional in most places.
Lender’s Title Policy
Protects the lender’s lien up to the loan amount. Most lenders require one, and the borrower usually pays for it.
Simultaneous Issue
Buying the owner’s and lender’s policies together on a purchase, so the lender’s policy costs only a small add-on fee ($100 in Texas, $25 in Florida).
Reissue Rate / Refinance Credit
A discount on a new policy when a recent policy already covers the home. Texas gives refinances a 25% to 50% credit (rule R-8); Florida offers reissue rates.
Promulgated Title Rates
Premiums set by the state regulator, so every title company charges the same premium for the same policy. Texas, Florida, and New Mexico work this way.
Title Search
A review of public records for the property’s ownership history, liens, judgments, easements, and unpaid taxes.
Title Commitment
The title company’s promise to issue a policy once listed requirements are met. Schedule A names the parties and amounts; Schedule B lists requirements and exceptions.
Title Exception
An item the policy specifically does not cover, such as recorded easements, deed restrictions, HOA covenants, mineral rights, or survey matters.
Title Endorsement
An add-on that changes a policy’s coverage, for example for a condo, a planned unit development, an adjustable-rate loan, or environmental liens.
Title FAQ
Educational content, not legal advice. Title practices, rates, and customs vary by state and county. For a question about a specific property, lien, or deed, ask your title company or a real estate attorney licensed in your state.