Title insurance policies protect your legal ownership of a home or piece of real estate by covering expenses that result from disputes over who owns the property.
On average, title insurance costs range from $1,970-2,760 across the Owner's and Lender's policy premiums and title fees. However, costs can vary dramatically depending on your location and the sale price of the home.
Title insurance costs can be broken down into three categories:
- Lender's policy premiums
- Owner's policy premiums
- Title fees
In this article, we cover everything you need to know about title insurance costs, including some useful tips on how to save big.
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- What is title insurance
- How much is title insurance?
- Title insurance costs by policy type
- Title insurance costs by state
- How to get cheap title insurance
What is title insurance?
Title insurance policies help shield lenders and home buyers from previously undisclosed title defects or problems during a property’s transfer of ownership, including public record errors, undisclosed liens, and illegal deeds.
In the event of a title dispute during or after the sale, the title insurance company may be responsible for covering some or all of the associated costs specified by the policy.
» MORE: What Is Title Insurance?
There are two types of title insurance policies:
- Lender's title insurance, which protects mortgage lenders and is typically required
- Owner's title insurance, which protects the homeowner and is optional
Title insurance is different from homeowner's insurance; it won't pay for damages to your home or your possessions and doesn't include any personal liability coverage.
Unlike homeowner's insurance — where you have to continually renew your policy — title insurance is a one-time cost that lasts for as long as you own the home.
During a typical home sale, who pays for title insurance — the buyer or seller — is negotiable. However, the seller will typically pay for the owner's title insurance, whereas the buyer is almost always expected to cover the cost of the lender's policy.
How much is title insurance?
Title insurance costs can vary, but for a typical home, expect to pay around $2,000, all-in, for title insurance.
When we talk about the cost of title insurance, we're usually referring to a combination of three different categories of fees, rather than a single charge:
- Owner's title insurance policy premiums (~0.4%): The price of the policy that protects the homeowner.
- Lender's title insurance policy premiums (~0.1%): The cost of the lender's title insurance policy. This policy is typically much less expensive than the owner's policy.
- Title fees (>$1,000): The title insurance company will charge you for the work associated with issuing the policy. Typical fees include title abstract, deed preparation, and title closing fees. Costs can vary dramatically depending on where you live and the title company you choose.
|Owner's title insurance premium||Lender's title insurance premium||Title fees|
Price ranges based on data from Stewart Title for home's sold for $200,000 and $400,000.
Title insurance costs by policy type
The cost of your owner's title insurance premiums will depend on what type of policy you purchase. We found that the cost difference between basic and enhanced policies was around 11%.
There are currently two types of owner’s title insurance policies certified by the American Land Title Association® (ALTA), the trade association that represents the title insurance industry nationwide.
|ALTA Owner’s Policy coverage||ALTA Homeowner’s Policy coverages|
|Recommended for...||Sales of vacant land or some commercial properties||Residential homes|
Buyers in some areas will be able to choose between the ALTA Owner’s and Homeowner’s policies — but in others, only one or the other may be available.
Different states will make ALTA Owner’s or Homeowner's the default option. If you want more or less coverage, you’ll need to make a specific request.
So how much title coverage do you need? Is opting for less coverage to save money on title insurance a good idea?
The short answer: usually not!
The smart choice for most homeowners is choosing the expanded coverage that comes with the ALTA Homeowner's policy.
The extra protection that this policy affords is well worth the added $80-140. Also, remember that title insurance is a one-time cost. In other words, it won’t show up in your ongoing monthly home payments.
Title insurance costs by state
Title insurance costs can vary greatly depending on where you live. Based on our research, here's the title insurance cost ranges for $200,000 and $400,000 homes in each state:
|State||Title insurance cost (lender's and owner's policies)*||Title fees|
* 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 homebuyers title coverage through the state-sponsored Iowa Title Guaranty program.
How to get cheap title insurance
Title insurance is one of the key areas where you may be able to save money on closing costs when buying a home.
With a little bit of extra effort and due diligence, you could save yourself hundreds or thousands of dollars on title insurance. Here's how:
Negotiate to have the seller cover the title insurance costs
Who pays for title insurance is 100% negotiable. If you’re buying a home, you may be able to get the seller to cover some or all of the title insurance costs. In some states, it may even be customary for the sellers to purchase the owner's title insurance policy.
Shop around and compare title companies
You may be able save a lot of money by comparing title rates and fees before choosing a title insurance company. We've found that title fees can vary by as much as 40%, depending on which provider you go with.
Though title fees can vary significantly, title insurance premiums may not. These premiums are regulated by each state's department of insurance, so they likely won’t change much from company to company.
Ask for a reissue rate
If you're buying a home from a seller who purchased it less than 10 years ago, you're eligible for a special title insurance pricing option called a "reissue rate." This is a reduced price offered because the new title insurer can essentially extend the previous policy.
The reissue rate will typically be around 40% less than the standard rate, which translates to savings of approximately $468-749 on title insurance premiums.
Buy both policies from the same title insurance company
You can get a discounted rate on your title insurance when you buy lender's and owner's title insurance from the same company. This is called a "simultaneous issue rate."
Based on our research of title insurance premiums, choosing to buy both policies from the same title insurance company could save you between 21-44%:
Potential Simultaneous Issue Savings: by City and Home Value
|Home Sale Price||Los Angeles||New York City||Dallas|
Figures represent the cost difference in title insurance premiums for both owner's and lender's policies, as provided by Stewart Title.
If you’re looking to save on home-selling costs, lowering your realtor commission fees will have the biggest impact on how much cash you walk away with after closing.
Clever’s free agent-matching service connects you with top local agents — and pre-negotiates low rates, saving you up to 50% on listing fees!
The cost estimates for title insurance featured on this page come from 345 price quotes from Stewart Title, First American Title, as well as an assortment of other title insurance companies. This data was collected in July, 2020.
The details we used to collect these quotes were:
|Transaction type||We assumed the transaction was a sale with a mortgage (with a 20% down payment).|
|Sale price||We collected data for homes sold for $200,000 and $400,000.|
|Location||For each state, we used the largest city (by population).|