What is title insurance?

The title company will be clearing the title so when you close it is clear of liens. They insure the title. You have seller's title insurance (for the current owner), buyer's or owner's title insurance (insuring the buyer's money or the money they are putting down), and lender's title insurance (insuring the lender's money).

Who pays for title insurance is in the purchase contract. Most of the time it is driven by who has historically paid for it in that area.

A question that often comes up regarding buyer's or owner's title insurance is, should I pay for it? If you are getting a loan the lender will require you to get lender title insurance. As mentioned above lender insurance covers the lender's money. Some think because the title company has cleared the title and insured for the lender this is most likely good enough and getting owners/buyer's title insurance is redundant. That is something each individual will have to decide on.