Who pays for owner's title insurance?
By custom the seller pays for the owner's title policy in most of Florida, Texas, Michigan, Illinois and Indiana. In some South Florida counties such as Miami-Dade and Broward the buyer usually pays, and in Ohio it varies by county. Your purchase contract always decides.
Who pays, state by state
- Florida
- Seller in most counties; buyer in some South Florida counties such as Miami-Dade and Broward
- Texas
- Seller (set in the TREC contract)
- Michigan
- Seller
- Ohio
- Varies by county
- Illinois
- Seller
- Indiana
- Seller
The buyer pays for the lender's policy whenever there is a loan. These are customs, not laws: buyer and seller can agree to anything, and the contract wins.
What it costs
Owner's title insurance is a one-time premium paid at closing. In Florida and Texas the premium is promulgated by the state, so every title company charges the same rate: about $1,325 on a $250,000 home in Florida and $2,386 on a $425,000 home in Texas. What does change between title companies is the closing fee. Ours is $299 in Texas, and $499 in Florida ($99 for sellers who prepay at checkout on beycome.com); it is $245 in Michigan, $345 in Ohio, $995 in Illinois and $245 in Indiana, less for sellers who prepay at checkout on beycome.com.
State details
Florida. It is negotiable, and the purchase contract decides. By custom the seller pays for the owner's policy in most of Florida, while the buyer usually pays in some South Florida counties such as Miami-Dade and Broward. The buyer pays for the lender's policy when there is a loan.
Texas. By custom in Texas the seller pays for the owner's policy, and the standard TREC purchase contract has a box to say which party pays. The buyer pays for the lender's policy when there is a loan.
Michigan. By custom in Michigan, the seller pays for the owner's title policy and the buyer pays for the lender's policy. It is negotiable, and the purchase agreement decides.
Ohio. In Ohio, who pays for the owner's title policy varies by county and is settled in the purchase contract. The buyer pays for the lender's policy when there is a loan.
Illinois. By custom in Illinois, the seller pays for the owner's title policy and the buyer pays for the lender's policy. It is negotiable, and the purchase contract decides.
Indiana. By custom in Indiana, the seller pays for the owner's title policy and the buyer pays for the lender's policy. It is negotiable, and the purchase agreement decides.
Questions
Who pays for owner's title insurance?
It depends on the state and the contract. By custom the seller pays in most of Florida, Texas, Michigan, Illinois and Indiana; in some South Florida counties such as Miami-Dade and Broward the buyer usually pays, and in Ohio it varies by county. The purchase contract always has the final word.
What does an owner's title policy cover?
It protects the buyer's ownership against covered problems from before the sale that the title search did not catch, such as a forged deed, an unknown heir, an unreleased lien or a recording error. It pays to defend your title and covers your loss up to the policy amount, for as long as you or your heirs own the home.
How much does an owner's title policy cost?
In Florida and Texas the premium is set by the state, so it is the same at every title company: about $1,325 on a $250,000 home in Florida and $2,386 on a $425,000 home in Texas. It is a one-time premium paid at closing.
Is the lender's title policy the same thing?
No. The lender's policy protects only the bank's loan and is required when you finance. The buyer pays for it. It does not protect your equity, which is what the owner's policy is for.
More in our glossary: owner's title insurance, lender's title insurance, title search. Ready to close? Get a quote or submit your contract.