What is Title Insurance?

Before I became a mortgage advisor, I spent 14 years working in the title and escrow industry — so this is a topic I’ve sat with from the inside, not just explained from the outside. “What is title insurance?” is one of the most common questions I get from buyers, and it’s worth understanding clearly before you get to closing, because it’s easy to mistake it for just another line item.

That title search typically happens through your escrow company as part of opening your transaction. If you’d like the full picture of everything escrow handles from offer to closing day, see this guide:

👉 Read: What Is Escrow? A Washington State Home Buyer’s Guide

Title insurance, in plain terms

Title insurance protects you against problems with a property’s history — not its future. If it turns out, after you’ve closed, that someone else had a legitimate claim to the home, that there’s an unpaid lien from a previous owner, or that a past deed had an error or forgery in it, title insurance covers the cost of defending and resolving that claim.

It’s the one type of insurance that looks backward instead of forward. Your auto or homeowners insurance covers things that might happen after your policy starts. Title insurance does the opposite — it covers you for things that happened before you owned the property, going all the way back through the chain of title.

Owner’s policy vs. lender’s policy

There are two separate title insurance policies in most transactions, and they protect two different people:

• Owner’s policy — protects you, the buyer, against title defects. This is the one that has your back if a claim surfaces later.
• Lender’s policy — protects the lender’s interest in the property, assuring them they’re in first lien position. If you’re financing the purchase, your lender will require this one.

In Washington, it’s customary for the seller to pay for the buyer’s owner’s policy on a purchase, while the buyer pays for the lender’s policy. On a refinance, there’s no new owner’s policy needed (you already own the home) — but the buyer pays for a new lender’s policy to protect the new loan.

Why there’s no renewal premium

Unlike auto, health, or homeowners insurance, title insurance is a one-time premium paid at closing — there’s no annual renewal bill. Because the policy covers events that already happened (errors in the public record, unknown heirs, forged signatures on a past deed, undisclosed liens), the risk doesn’t change year to year the way it does with, say, fire or theft. You pay once, at closing, and the coverage runs for as long as you (or your heirs) own the property.

What does title insurance actually cover?

Some of the more common things an owner’s title policy protects against:

• Liens from unpaid taxes, contractor work (mechanics liens), or judgments against a previous owner
• Errors or omissions in public records
• Forged deeds, mortgages, or releases
• Undisclosed heirs or missing signatures on a prior transfer
• Boundary or easement disputes tied to the chain of title

Before issuing a policy, the title company runs a title search and produces a preliminary title report, which lists anything currently attached to the property — existing liens, easements, or other claims — so they can be cleared or addressed before closing.

Do I have a choice in which title company I use?

Yes — in Washington, you have the right to choose your own title and escrow provider, and rates do vary between companies. I cover how to actually shop for it, including a few things worth knowing about pricing and affiliated business arrangements, in this companion post:

👉 Read: How to Shop for Title Insurance or Escrow in Washington

If you’re working through your loan options at the same time you’re comparing title and escrow quotes, that’s exactly the kind of conversation I help clients with. Get a purchase rate quote here, or if you’d rather talk it through, grab 30 minutes on my calendar.

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Frequently Asked Questions

What is title insurance?
Title insurance protects you against problems with a property’s past ownership history — like liens, errors in public records, or forged documents — that could surface after you’ve purchased the home.

What’s the difference between an owner’s policy and a lender’s policy?
An owner’s policy protects the buyer; a lender’s policy protects the lender’s interest in the property. If you’re financing your purchase, your lender will require a lender’s policy.

Who pays for title insurance in Washington?
On a purchase, the seller typically pays for the owner’s policy and the buyer pays for the lender’s policy. On a refinance, the buyer pays for a new lender’s policy.

Do I have to renew my title insurance policy?
No. It’s a one-time premium paid at closing, with no annual renewal — the coverage lasts as long as you own the property.

Can I choose my own title insurance company?
Yes. You have the right to select your own title and escrow provider in Washington, and it’s worth comparing rates between companies.

Last reviewed: June 2026