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Who Pays Title Insurance in Illinois

Who Pays Title Insurance in Illinois?

When it comes to the purchase of real estate, various costs and fees are involved. One such fee is title insurance, which is crucial for protecting both the buyer and the lender against potential title defects or claims. However, the question of who pays for title insurance in Illinois is often raised. In this article, we will delve into this topic and provide answers to frequently asked questions.

What is Title Insurance?

Title insurance is a type of insurance that safeguards against losses that may occur due to defects in the title or ownership rights of a property. It is different from other types of insurance, such as home or auto insurance, as it focuses on protecting the buyer and lender from potential issues that arise from the property’s history.

Title defects can include outstanding liens, conflicting ownership claims, undisclosed heirs, or errors in public records. If a title defect is discovered after the purchase, title insurance can provide financial protection to the policyholder.

Who Pays for Title Insurance in Illinois?

In Illinois, the party responsible for paying for title insurance can vary depending on the circumstances of the real estate transaction. It is common for the buyer to pay for the owner’s title insurance policy, while the lender typically requires the borrower to pay for a lender’s title insurance policy.

Owner’s Title Insurance Policy:

The owner’s title insurance policy protects the buyer against title defects that may arise before the property is purchased. While it is not legally required in Illinois, it is highly recommended. The policy is typically a one-time premium paid at the time of closing, and the coverage lasts for as long as the buyer or their heirs own the property.

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Lender’s Title Insurance Policy:

The lender’s title insurance policy protects the lender’s interest in the property. It is usually a requirement for obtaining a mortgage loan. The borrower is typically responsible for paying the premium for this policy. The lender’s policy coverage decreases as the mortgage is paid off, and it is terminated once the loan is fully repaid.


1. Is title insurance required in Illinois?

While title insurance is not legally required in Illinois, most lenders will require a lender’s policy to protect their interest in the property. Purchasing an owner’s policy is highly recommended to protect the buyer’s investment in the property.

2. How much does title insurance cost in Illinois?

The cost of title insurance in Illinois can vary based on the purchase price of the property. The premium is typically a one-time payment made at the time of closing. It is recommended to obtain quotes from multiple title insurance companies to compare prices and coverage.

3. Can the buyer negotiate who pays for title insurance?

In some cases, the buyer may negotiate with the seller to split the cost of title insurance or request the seller to pay for it entirely. However, this is subject to mutual agreement and should be included in the purchase contract.

4. Can title insurance be transferred to a new owner?

No, title insurance is not transferable. Each new owner would need to obtain their own title insurance policy to protect their interests.

5. Can title insurance protect against future claims?

Yes, title insurance covers both known and unknown title defects. It provides financial protection against claims that may arise in the future, even if they were not discovered during the initial title search.

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In conclusion, the responsibility for paying for title insurance in Illinois depends on the type of policy. The buyer typically pays for the owner’s policy, while the borrower pays for the lender’s policy. Although not legally required, title insurance is highly recommended to protect both the buyer and lender from potential title defects or claims. It is essential to understand the terms and coverage of the policy before purchasing a property to ensure a smooth and secure real estate transaction.

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