Who Pays for Title Insurance in California?

There is no California law that dictates who pays for title insurance. It is 100% negotiable between the buyer and seller and gets memorialized in the Residential Purchase Agreement (RPA). What actually happens on most deals is driven by county custom — the default that escrow officers, agents, and lenders assume unless the contract says otherwise.

In the South Bay, Westside LA, and virtually all of Southern California, the seller pays the premium for the buyer's owner's title insurance policy (the CLTA or ALTA Homeowner's policy). The buyer pays the premium for the lender's policy (the ALTA Loan policy) as part of their closing costs. That's the custom in Los Angeles County, Orange County, Riverside, San Bernardino, Ventura, and San Diego.

In parts of Northern California — San Francisco, Alameda, Contra Costa, and several Bay Area counties — the custom flips: the buyer pays for both the owner's and the lender's policies. In a handful of counties the cost is split 50/50. The C.A.R. Residential Purchase Agreement has checkboxes for exactly this reason, so the parties confirm who pays before opening escrow.

Is an owner's title insurance policy required in California? Not by law. If a buyer is paying all cash and skips the owner's policy, no one will force them to buy one — but doing so leaves them financially exposed to every hidden defect the title search didn't catch (forged deeds, undisclosed heirs, old mechanic's liens, recording errors, prior fraud). The lender's policy only protects the bank, not the buyer's equity. Because sellers customarily pay for the owner's policy in Southern California anyway, most buyers accept it — it is the cheapest form of asset protection they will ever buy.

A quick way to think about the two policies: the lender's policy protects the bank up to the loan amount and shrinks as the mortgage is paid down. The owner's policy protects the buyer up to the full purchase price for as long as they or their heirs own the property. Both are one-time premiums paid at closing, not recurring like homeowner's insurance.

How much does it cost? Title insurance premiums in California are regulated and filed with the California Department of Insurance. Rates are based on the purchase price (for the owner's policy) and the loan amount (for the lender's policy). On a $1.5M South Bay sale, the seller's owner's policy premium typically runs in the low four figures, and the buyer's lender's policy is a few hundred dollars because it is issued concurrently at a heavily discounted 'simultaneous issue' rate.

For agents writing offers in the South Bay or Westside LA: leave the title insurance boxes on the RPA at the county custom (seller pays owner's, buyer pays lender's) unless there is a specific reason to negotiate it. Flipping the custom without explaining it will confuse the other side's agent and can slow the deal down.

For agents writing offers on out-of-area property — especially anything north of the Grapevine — always check the county custom before finalizing the RPA. What is standard in LA is not standard in San Francisco, and getting it wrong means one party ends up paying a cost they did not expect.

Matt Goeglein and Xavier de la Piedra IV at Fidelity National Title can pull an accurate title insurance quote for any Southern California property in minutes. If you have a listing coming up or an offer in progress and want to confirm who pays what before you present, reach out — that quote lets you show the seller their true net proceeds or show the buyer their real closing costs.