Title insurance protects your legal ownership of a property from problems that existed before you bought it, and while an owner's policy isn't legally required in Washington, skipping it is a risk most Spokane home buyers shouldn't take. It's one of those closing costs buyers often don't think about until it shows up on a settlement statement, and it's easy to assume it's just another fee rather than genuine protection. Here's what title insurance actually covers, the difference between the two types you'll encounter, and how to think about whether it's worth it for your Spokane home purchase.
What Is Title Insurance?
Title insurance protects a homeowner or lender against financial loss from problems with a property's legal ownership history, things a standard title search doesn't always catch. Before closing, a title company researches public records to confirm the seller has clear legal ownership to sell. But even a thorough search can miss hidden liens, forged documents, recording errors, unresolved estate claims, or unpaid contractor bills tied to a previous owner. If one of those issues surfaces after you own the home, title insurance covers the legal defense and financial loss, rather than leaving you to handle it yourself.
What Is the Difference Between an Owner's Policy and a Lender's Policy?
A lender's title insurance policy protects the mortgage company, while an owner's title insurance policy protects you, and having one doesn't mean you have the other. If you're financing your purchase, your lender will almost always require a lender's policy, and you'll typically pay for it as part of your closing costs. That policy only protects the lender's financial interest in the property, generally up to the loan amount. It does not protect you personally. An owner's policy is a separate policy that protects your own ownership rights, and it's optional in Washington, which is exactly why it's worth understanding before you decide to skip it.
Do You Really Need an Owner's Title Insurance Policy?
An owner's policy isn't legally required in Washington, but most real estate professionals recommend it because a single title dispute can cost significantly more than the one time premium. Title issues are more common than most buyers expect, and they often surface after mutual acceptance, once the preliminary title report is actually reviewed. If a claim appears later and you only have a lender's policy, you are personally responsible for defending your ownership and covering any financial loss, since the lender's policy doesn't protect you at all.
Who Pays for Title Insurance on a Spokane Home Sale?
In most Washington transactions, the seller customarily pays for the buyer's owner's policy, while the buyer pays for the lender's policy, though this is negotiable and not set by law. Because Washington's title insurance rates are generally filed and consistent across companies, the actual premium tends to be similar no matter which title company you use in the Spokane area. Choosing a title company based on experience and communication matters more than shopping for the lowest price.
What Does Title Insurance Cost, and How Long Does It Last?
Title insurance is a one time premium paid at closing, and the policy lasts for as long as you own the property, with no ongoing payments required. The cost is based on the property's value, and if you're purchasing both an owner's and a lender's policy through the same title company at the same closing, the lender's policy is often priced at a reduced simultaneous issue rate.
What Does This Mean for Buyers in Spokane?
Understanding the difference between an owner's and lender's policy, and confirming exactly which one you're receiving, is worth a direct conversation before closing rather than an assumption. Emiley and Zech at Rios and Co Real Estate can help you understand what's typical for your specific transaction and make sure you're not left unprotected after closing.
About the Authors
Emiley and Zech, Rios and Co Real Estate
Emiley and Zech are Spokane based real estate agents with Rios and Co Real Estate who guide buyers and sellers through every stage of a transaction, including closing cost details like title insurance that are easy to overlook but matter significantly if a problem surfaces later.
This article is for general informational purposes and does not constitute legal or financial advice. Title insurance requirements, costs, and customary payment practices can vary by transaction. For guidance specific to your purchase, consult your real estate agent, lender, or title company directly.
