Last reviewed: 2 October 2026
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Title insurance, explained
Title insurance protects against problems with the legal title to a property. The CFPB distinguishes a lender’s policy, which protects the lender, from an owner’s policy, which protects the buyer, and says a seller cannot require you to buy from a particular company.
What this term means: “title” is the legal claim to a property. The CFPB gives the example of someone suing to say they have a claim against the home as a title problem.[1]
Lender’s and owner’s title insurance
| Lender’s title insurance | Owner’s title insurance | |
|---|---|---|
| Who it protects, per the CFPB | Your lender, against problems with the title to your property.[1] | The CFPB says an owner’s policy is what you may want to purchase to protect your equity in the event of a title problem.[1] |
| Is it required? | The CFPB says it is usually required to get a mortgage loan.[1] | The CFPB says “you may want to purchase” one; the page we read does not say it is required.[1] |
| What it covers | Only claims that affect the lender’s loan. It does not protect your investment in the home (your equity).[1] | This page does not describe the coverage of an owner’s policy; the CFPB has a separate page, “What is owner’s title insurance?”, which we have not summarized. |
The CFPB says that if someone sues with a claim against your home, you are the first person responsible, and the lender’s policy covers only claims that affect the lender’s loan.[1]
Can a seller require a particular title insurance company?
The CFPB’s answer is no. It says that under the Real Estate Settlement Procedures Act (RESPA), a seller may not require, directly or indirectly, a borrower to purchase title insurance from any particular company as a condition of the sale of a home.[2]
A related but separate rule: RESPA Section 8
The federal statute on kickbacks and unearned fees, 12 U.S.C. § 2607, is a different provision from the seller rule above. In summary, it says no person shall give or accept a fee, kickback or thing of value under an agreement or understanding that business incident to a real estate settlement service involving a federally related mortgage loan will be referred to any person, and no person shall give or accept a portion or percentage of a settlement-service charge other than for services actually performed.[3] The statute lists exceptions, including payment by a title company to its duly appointed agent for services actually performed in issuing a title insurance policy, and affiliated business arrangements that meet disclosure conditions, including that the person is not required to use any particular provider of settlement services.[3] Our guide, RESPA Section 8, explained, covers this in detail, and it is part of our published standard.
How to verify this yourself
Read the two CFPB pages and the statute text in the reference list; they are the source for each statement above. For how title insurance appears as a cost and which services you may be able to choose the provider for, see services you can shop for on your Loan Estimate and your own Loan Estimate and Closing Disclosure. If you think a requirement breaks these rules, the CFPB complaint process is described in how to file a complaint.
What this page does not cover
This page is general information, not legal advice. It does not cover title insurance premiums or how they are set, state rules, how title searches work, or what a particular policy covers or excludes. It does not say whether you should buy an owner’s policy. The CFPB pages we read were last reviewed 11 September 2024; this page was last reviewed 2 October 2026.