Title insurance protects you against problems with a home's ownership history that surface after you close — an old lien no one caught, a forged signature on a prior deed, an heir nobody knew about. Every Washington purchase involves two separate policies: a lender's policy (required if you're financing, protects the mortgage company) and an owner's policy (optional but recommended, protects your equity). By custom in King County, the seller typically pays for your owner's policy while you typically pay for the lender's policy — though that split is negotiable in the contract, not set by law. Here's how it actually works.
What title insurance actually protects you against
When you buy a home, the title company researches the public record to confirm the seller actually owns the property and can legally transfer it to you free of undisclosed claims. That search can still miss things — a lien that was never properly released, a deed decades ago with a forged signature, a missing heir with a legal claim, or a clerical error in the county recorder's files. Title insurance protects you against financial loss and legal defense costs if one of those hidden defects surfaces after you've already closed and the home is yours.
It works differently from the home or auto insurance you're used to: there's no ongoing claims history and no annual renewal premium. You pay once, at closing, and the policy protects you for as long as you (or your heirs) hold an interest in the property.
Owner's policy vs. lender's policy — the two policies in every purchase
Nearly every financed purchase in Washington involves two distinct title insurance policies, insuring two different parties against the same underlying risk:
- Lender's policy. Protects your mortgage company's financial interest in the property up to the loan amount. Virtually every lender requires it as a condition of the loan, and the coverage amount shrinks as you pay down your mortgage. It does not protect your equity.
- Owner's policy. Protects your own equity in the home — the purchase price you paid, not just the loan balance. It's optional (no one can force you to buy it), but it's the only one of the two that actually covers you personally, and most real estate attorneys and title professionals recommend buyers get one. If you pay cash, the lender's policy doesn't apply to you at all, which makes the owner's policy the only coverage protecting your purchase.
Who pays for title insurance in Washington?
There's no state law dictating who pays for title insurance — it's whatever the purchase and sale agreement says. That said, local custom is well established: in King County and across most of Washington, the seller customarily pays for the buyer's owner's policy, while the buyer customarily pays for the lender's policy their own mortgage requires. Escrow fees are typically split evenly between the parties. This custom shows up in standard Washington purchase and sale agreements, but because it's a custom rather than a mandate, either side can propose a different allocation as part of negotiating the offer — and in a competitive market, you may see that term used as a small negotiating lever either way.
How much does title insurance cost?
Combined, owner's and lender's title insurance premiums in Washington commonly run in the neighborhood of 0.5% to 1% of the purchase price, though the exact number depends on your purchase price, the title company you use, and whether you add any extended coverage. Washington title insurers don't set rates freely — under RCW 48.29.147 and the implementing rules in WAC 284-29A, title insurance rates must be filed with and approved by the Washington Office of the Insurance Commissioner before they can be used. That regulatory layer doesn't mean every company charges the same amount, so it's still worth asking your escrow or title company for a specific quote on your transaction rather than assuming a flat percentage. See our closing costs guide for how title fits into your overall buyer closing costs.
The preliminary commitment: what to review before closing
Early in your transaction, the title company issues a preliminary commitment (sometimes called a prelim or a title report) — essentially a promise to issue a policy once the sale closes, subject to specific listed exceptions. It typically has two key parts: a schedule showing what the company is prepared to insure, and a schedule listing exceptions — items like existing deeds of trust, recorded liens or judgments, unpaid property taxes, recorded easements, and CC&Rs that will remain on title (or need to be cleared before closing). Your purchase agreement should give you a window to review the preliminary commitment and raise an objection to anything you're not willing to accept, similar in spirit to how a home inspection contingency works — see our home inspection contingency guide for that comparison.
Reading the prelim carefully matters. Most of the exceptions are routine (an existing mortgage the seller will pay off at closing, standard utility easements), but occasionally something unexpected shows up — an old access easement benefiting a neighbor, a lien that needs to be resolved, or a legal description that doesn't match what you expected. Flagging it during your contingency period, rather than after closing, is far simpler to fix.
What a standard policy doesn't cover
Title insurance is broad, but it isn't unlimited. A standard policy generally excludes matters that only an accurate, current survey would reveal — boundary line disputes, encroachments, and discrepancies between the legal description and where fences or structures actually sit on the ground. It also doesn't cover anything specifically listed as an exception in your policy's Schedule B, since those items were disclosed and excluded from coverage rather than hidden. For buyers concerned about boundary or survey-related risk — common on older Eastside lots with mature landscaping or additions built over the years — an extended policy (often called an ALTA homeowner's policy) can add coverage for some of these additional risks for a higher premium; ask your title company whether it's worth it for a specific property.
A flat fee agent who reviews the title commitment with you
Title insurance is one more document in a stack of paperwork during your transaction, and it's easy to let it pass by unread. Part of what a buyer's agent should be doing — flat fee or traditional — is flagging anything unusual in your preliminary commitment before your objection window closes, right alongside inspection and financing contingencies. A traditional buyer's agent charging roughly 2.5% commission on a $900,000 Eastside home costs about $22,500. A flat $2,999 buyer service provides the same core representation — offer strategy, contract review (title commitment included), negotiation, and closing support — while leaving most of that difference in your pocket for closing costs or your down payment. See the full comparison in flat fee vs. a traditional buyer's agent, and how earnest money fits into the same closing timeline in our earnest money guide.
General information, not legal advice. Title insurance policy language, exceptions, premiums, and the customary allocation of who pays for which policy can vary by title company, county, and the specific terms negotiated in your purchase agreement — confirm current details with your escrow/title company and review your specific preliminary commitment and policy with a Washington real estate attorney if you have questions about coverage. Shi Hao Liu is a licensed WA real estate broker (License #26003789) with Kelly Right Real Estate, not an attorney or title insurance professional. Verify any WA broker at the WA Department of Licensing.