Key Takeaways
- Lender's title insurance is required by your mortgage company.
- Owner's title insurance is optional but protects your ownership.
- Most buyers choose both policies for complete protection.
Do I have to buy owner's title insurance?
You want to know whether you have to buy owner's title insurance or if lender's title insurance covers you too. Only lender's title insurance is typically required by your mortgage company—owner's title insurance is usually optional.
Lender's title insurance protects your mortgage company if title problems come up after closing. The policy covers the loan amount and decreases as you pay down the mortgage. Owner's title insurance protects your ownership interest in the property. The policy covers the purchase price and stays in effect as long as you or your heirs own the home.
You can check your Loan Estimate to see title insurance costs. Section C shows required services, while optional services appear in Section B. The lender's policy premium depends on your loan amount. Owner's coverage typically costs a few hundred dollars more.
Most home buyers choose both policies since title problems can include issues like unpaid liens, forged documents, or ownership disputes from previous sales. Your settlement agent can explain coverage differences and walk you through both policies before closing.
