Title Insurance

10 Who Pays the Premium for the Title Policy? In California, settlement practices vary from locality to locality. The party that pays the title premium is a matter of local custom and practice and not set by law. Depending upon the region, the premium for a title insurance policy can be paid by the buyer or the seller or split between both parties. In Southern California, the seller customarily pays the premium for title insurance. It has been the practice in Northern California that the buyer customarily pays the premium for title insurance, or occasionally the premium is split between buyer and seller. In almost every county, the buyer pays the lender’s policy premium. The parties are free to negotiate a different allocation of fees. Your title company or escrow company can advise you as to who normally pays the premium in your area. How is the Premium Determined and When is it Paid? Title insurance premiums are based on the dollar amount of coverage provided. Every title insurance company is required to file its schedule of rates and forms with the Insurance Commissioner. Premiums are paid only once, at the close of escrow. There are no continuing premiums like other types of insurance. How Much Title Insurance Will I need? The home buyer should insure the full purchase price of the property; the lender only requires title insurance to cover the amount of your loan.