Title insurance is valuable coverage protecting buyers and lenders from claims on real property ownership that can arise from the past. Title insurance is a small price to pay to protect what may be your most significant investment.
Costs vary from state to state but expect the premium on an owner’s policy to be at least 0.5% of your new home’s purchase price. Title insurance for the lender and the owner typically runs about $2,000 together.
How much does title insurance cost?
Title insurance is a one-time expense when closing on a house. However, the total cost of title insurance covers three separate expenses:
- Owner's policy (0.4%)
- Lender's policy (0.1%)
- Title fees (0.5–1.0%)
Owner’s title insurance: Coverage for you
This one-time purchase protects you for as long as you own the house. It even covers your heirs when they inherit the home. The owner’s policy costs approximately 0.4% of your home's purchase price.
Although owner's title insurance is optional, it’s a sound investment that can prevent a devastating financial loss.
Lender’s title insurance: Coverage for the mortgage company
Also called a loan policy premium, this type of title insurance protects your mortgage lender if there's a claim on your house before your mortgage is fully paid.
Most lenders require you to buy insurance when you buy or refinance your home. The premium typically costs about 0.1%.
Title fees: Part of closing costs
Individual service charges that support the title policy and its coverage cost about 0.5–1% of the home purchase price, typically less than $1,000.
The types of services and fee names vary by title company. Some examples 👇
Title search and abstract fee
Wire fee or transfer tax
Tax and assessment search
Attorney or notary fee
Title settlement fee
Closing protection letter
Deed and document preparation fee
Simultaneous policy issuance
Who usually pays for title insurance?
Mortgage lenders typically require that buyers purchase a lender’s policy.
Who pays for owner’s title insurance and additional title fees is often determined by where you live. The seller pays for the owner’s policy in several states.
It’s common for buyers and sellers to split the fees that come with the title insurance premiums. But you and the seller may negotiate different terms.
Title insurance costs by state
Title insurance costs can vary greatly depending on where you live. Based on our research, here are the typical title insurance costs in each state:
Title insurance cost (lender's and owner's policies)*
* Premiums quoted are for simultaneous issue rates, where both policies (the lender's and owner's) were purchased from the same title insurance company.
** Iowa provides home buyers title coverage through the state-sponsored Iowa Title Guaranty program.
What does title insurance cover?
Even after a sale, there are many reasons someone can challenge a title to (and ownership of) a property.
The types of services covered by title insurance vary based on the title company. But generally all title insurance policies provide protection and representation against issues related to the title, such as:
- Prior forgery or fraud
- Unrecorded liens from a government authority
- Clerical errors related to the title
- Debts to unpaid contractors
- Encroachments of neighboring structures
- Loss of land access
- Deeds of fictitious individuals
- False representation of marital status
- Problems resulting from inaccurate marital status
- Adverse possession
- Criminal acts property forfeiture
- Misreading of wills
- State inheritance and gift tax liens
- Incorrect document modification
- Improper abstracting due to error
- Tax record errors and tax assessments
- Deeds by minors
- Legal incapacity
- Improper legal capacity of foreign trustees and personal representatives
- Documents prepared with expired, false, or revoked powers of attorney
- Improper notarization resulting in defective acknowledgments
- Unidentified heirs
- Prescriptive rights in another
- False impersonation
- Issues stemming from adoption
- Inaccurately recorded documents
- Omissions of necessary parties in specific court proceedings
- Chain of title caps
- Substandard building liens
- Equitable mortgage deeds that appeared absolute
- Title transfers due to duress
- Decedent’s creditor claims against property wrongly conveyed to heirs
- Real property homestead exclusions
- Problems involving the Soldiers’ and Sailors’ Civil Relief Act protecting military service members
Title endorsements are insurance protection add-ons overseen by the American Land Title Association. They provide specific coverage above and beyond the standard protections.
Many endorsements are specific to the type of property you’re buying, and they can also address particular title defects.
There are nearly 100 real estate title endorsements. Some examples 👇
PUD (planned unit development)
Environmental protection lien
Minerals and subsurface substances
Restrictions, easements, and encroachments
Access and entry
Title companies charge per endorsement, averaging about $75.
As with most home purchasing costs, the rates vary depending on the property, the title company, and the jurisdiction. Additionally, endorsement fees may be charged as a premium percentage or as a set fee.
Buying title insurance
You (or you and the seller) will buy title insurance when you close on your home purchase — that’s when the payment is due. But you can start shopping as soon as you're pre approved for a mortgage.
You want a title company in place to start the title search as soon as a seller accepts your offer. Your lender is required to provide a list of title insurance providers and their contact information with your loan estimate.
But don’t limit yourself — as for recommendations from friends, family members, and co-workers who have recently sold or purchased homes.
Don't forget to ask your agent for suggestions! Realtors work with title companies day in and day out and often have close working relationships.
Your title will probably have an American Land Title Association (ALTA) Homeowner’s Policy. ALTA sets guidelines and policies for residential title insurance coverage. That helps standardize the protections, endorsements, and forms used nationwide.
ALTA also offers an Owner’s Policy, which is typically used for land sales or commercial properties.
How to save on title insurance costs:
- Negotiate individual service fees
- Get a lower rate when refinancing
- Work with a realtor who offers cash back
Negotiate individual service fees
Many states regulate the premium rates for owner’s and lender’s title insurance coverage. So you’re unlikely to find cheaper policy premiums by comparison shopping in those locations.
However, you can save on the service fees title companies charge to research, process, and issue the title policies.
- Shop around. Check the ALTA website and get referrals from your realtor, friends, and co-workers. (Assess price and quality.)
- Compare add-on fees from multiple title companies.
- Ask your top pick if they’re willing to match or remove fees.
- Request combined policy discounts. Many title companies will issue discounts if you buy an owner’s and lender’s policy simultaneously.
- Ask about a lower reissue rate if the seller has an owner’s title insurance policy.
- Negotiate with the seller to have them cover more of the costs.
Get a lower rate when refinancing
You can save 10–50% off the standard price of title insurance when qualifying for a reissue rate.
Ask about it when refinancing a loan since you already have a lender’s title insurance policy in place. This option may also apply when purchasing a home from a seller with an owner’s policy less than 10 years old. Time limits vary depending on the lender.
But you don’t have to purchase the coverage from the same title insurance company that issued the original policy.
Work with a realtor who offers cash back
Connecting with an experienced local agent is a good way to kickstart your home buying process. Agents can help you set a budget and recommend trusted lenders so you can compare rates, get preapproved, and start touring houses.
We recommend trying out Clever Real Estate’s free agent matching service. Clever matches you with the best local buyers agents with no obligation. And you can qualify for 0.5% cash back — that’s $2,000 on a $400,000 home purchase! Learn more.
- Title insurance is essential coverage for mortgage borrowers, protecting both owners and lenders from title defects and ownership claims.
- Title insurance typically costs around $2,000 as part of closing costs. But home purchase price, state of residence, loan amount, and individual title fees affect the final cost.
- Mortgage companies require lender’s title insurance to protect the lender’s financial interests, and buyers can purchase owner’s title insurance for their personal protection.
- Home buyers can save on title insurance costs by shopping around, comparing title fees, and negotiating payment responsibilities with the seller.
Buyers typically pay for the lender’s title insurance — they're often required to by the lenders. Who pays the premiums for owner’s title insurance or additional title fees often varies by state
Title fees are typically 0.5–1.0% of a home's purchase price and can run as high as $1,000. Your loan amount and location can impact your title insurance fees. Plus, individual title insurance service fees often vary between providers.
Loan Estimate Explainer. "Consumer Financial Protection Bureau."