By Mike Basti, President and Mortgage Broker · NMLS #322904Title insurance protects you and your lender against hidden defects in a property’s ownership history — unpaid liens, errors in public records, forgery, or an unknown heir’s claim. There are two policies: a lender’s policy (required by your mortgage, protects the lender’s loan amount) and an owner’s policy (optional but recommended, protects your equity). It’s a one-time premium paid at closing that covers you for as long as you own the home.
What it protects against
Unlike homeowners insurance, which covers future events (fire, theft), title insurance covers past problems that surface after you buy: a prior owner’s unpaid taxes or contractor liens, recording errors, fraud or forgery in the chain of title, boundary disputes, or a long-lost heir claiming ownership. Any of these could threaten your right to the home; the policy defends your title and pays covered losses.
Lender’s vs. owner’s policy
| Lender’s Policy | Owner’s Policy | |
|---|---|---|
| Protects | The lender’s loan balance | Your equity/ownership |
| Required? | Yes, by the lender | Optional (recommended) |
| Duration | Until the loan is paid off | As long as you own the home |
Who pays, and what it costs
Title insurance is a one-time premium at closing (not monthly). In California, who pays which policy is negotiable and varies by county custom — often the buyer pays the lender’s policy while the seller pays the owner’s, or it’s split. Cost scales with the price and is part of your closing costs. A title search happens first; insurance covers what the search can’t find.
Bottom line: Always take the owner’s policy. It’s a small one-time cost relative to your equity, and it’s the only thing standing between you and a stranger’s old claim on your home. Your escrow officer itemizes it on your Closing Disclosure.
What to check on your preliminary title report
Early in escrow you’ll get a preliminary title report, often called the “prelim.” It lists what the title company found and what it plans to exclude. Read it with your agent and look for:
- Liens such as unpaid taxes, mechanic’s liens or old loans that must be paid at closing
- Easements that let a utility or neighbor use part of the property
- CC&Rs and HOA restrictions on rentals, additions or ADUs
- Exceptions the policy will not cover
- The vesting, meaning the current owner’s name matches the seller on the contract
Watch the dates too. An old loan that shows as open may simply need a reconveyance recorded, which escrow can usually handle. Questions are easier to resolve now than after you close. Your escrow officer can explain any item. Our escrow guide covers the rest of the timeline.
Title insurance when you refinance
A refinance is a new loan, so the new lender requires a new lender’s policy. Your owner’s policy from the purchase generally stays in force, so you don’t buy it again. Many title companies offer a reduced refinance rate, which is one reason refi title costs are usually lower than purchase title costs.
| Transaction | Lender’s policy | Owner’s policy |
|---|---|---|
| Purchase | Yes | Yes, usually recommended |
| Refinance | Yes, new policy | No, the original policy continues |
Who pays which policy on a purchase follows local custom. In much of Southern California the seller customarily pays the owner’s policy, while in parts of Northern California the buyer often does. It is always negotiable in the contract. Rates change daily, so for an accurate quote call 949-379-5320 (Newport Beach) or 310-759-4757 (Marina del Rey).
Frequently asked questions
What does title insurance protect against?
Hidden problems in the property’s ownership history — unpaid liens or taxes, recording errors, forgery or fraud, boundary issues, and unknown heirs — that could challenge your ownership after you buy.
What is the difference between owner’s and lender’s title insurance?
The lender’s policy (required) protects the lender’s loan amount; the owner’s policy (optional but recommended) protects your equity. Both are bought once at closing.
Who pays for title insurance in California?
It’s negotiable and varies by county custom — commonly the buyer pays the lender’s policy and the seller pays the owner’s, or the cost is split. It’s part of closing costs.
Is title insurance a one-time or monthly cost?
One-time. You pay a single premium at closing, and the coverage lasts as long as you own the home (owner’s policy) or hold the loan (lender’s policy).
Do I need new title insurance when I refinance?
You need a new lender's policy because it's a new loan. Your owner's policy from the purchase generally continues, so you don't buy it again, and many title companies offer a reduced refinance rate.
What is a preliminary title report?
It's the title company's early report showing who owns the property, any liens, easements and restrictions, and the items the policy will exclude. Review it during escrow so problems get fixed before closing.
Save Financial, Inc. — NMLS #377740, DRE #01875766. Equal Housing Opportunity. Figures are illustrative for 2026 and not an offer of credit or a guarantee of rates or approval.