What is Title Insurance?

A title insurance policy is an insured statement about ownership of interest on a specific piece of real property. The basic policies insure the owner or others having an interest in the property against loss by encumbrance, defective title or adverse claims against the title.

A preliminary commitment for the title insurance is the first stage in the insuring process. It is issued after a thorough search of public records have revealed the condition of recorded title. This would include current money obligations against the property, easements and restrictions of record, covenants, conditions, and any other matter of record which may affect the right of ownership, possession and use of the property.

The second or final stage of the insuring process occurs when the conveying or security instrument (deed, contract, mortgage, deed of trust, or assignment) is executed, “delivered” and recorded, after which the final policy is issued.


By custom, not law, the owner’s typical title insurance policy is paid for by the seller. Again, by custom, the purchaser pays for the title insurance policy insuring the lending institution providing the financing. Again, this is by custom, and the buyer and seller may agree between themselves as to who should bear the cost of title insurance.

The premium itself is determined by the amount and type of coverage to be provided. However, unlike other types of insurance, the premium is paid only once and is effective as long as the original policy holder, their heirs or divisees, retain title or “ownership”. Title insurance rates are filed with the Washington State Insurance Commissioners office in Olympia, Washington. This office regulates the activities of title insurance companies, as well as other insurance companies operating in the State of Washington.