Who pays for title insurance in Utah?

In most Utah home sales the seller pays for the owner's policy that protects the buyer, and the buyer pays for the lender's policy that protects the mortgage lender. That is the custom across most of the state, and it is what most contracts end up saying.

It is not, however, the law. No Utah statute assigns either policy to either party. Who pays is a term of your purchase contract, which means it is negotiable in exactly the way the price is negotiable. If your contract says something different from the custom, the contract wins.

The two policies, and what each one does

The single biggest source of confusion here is that people say "title insurance" as though it were one thing being bought once. In a financed purchase there are usually two separate policies, issued at the same closing, covering two different people.

The owner's policy

The owner's policy protects you, the buyer, as the new owner of the property. It covers title problems that already existed on the day you bought — an old lien nobody released, a deed signed by someone who did not have the authority to sign it, an error in how a document was recorded. You pay for it once. There is no monthly premium and no renewal notice.

The lender's policy

The lender's policy protects your mortgage lender, and only your lender. It covers the lender's interest in the property up to the loan balance, and it shrinks as you pay the loan down. If you refinance, your new lender will require a new lender's policy, because the old one was tied to the loan that just got paid off.

A lender's policy does nothing for you personally. That is the part worth understanding before you decide whether to skip the owner's policy: if you buy only the policy your lender insists on, the party protected is the bank.

For what each policy actually covers, see what title insurance protects you from.

Who pays in a typical Utah sale

The logic behind the custom is that the seller is the one warranting that they own what they are selling, so the seller buys the assurance that backs that promise. The buyer is the one choosing to borrow, so the buyer covers the cost the loan creates.

Both halves of that are conventions rather than rules, and both get traded away in real negotiations all the time.

Why "custom" is not the same as "required"

This is where most of the pages that rank for this question are thin. They give you the customary split as though it were a statute, and it is not one.

What actually decides it is the purchase contract — in most Utah residential sales, the state-approved Real Estate Purchase Contract that your agent prepares, plus any addenda. The contract has a section allocating settlement charges between buyer and seller. Whatever it says there is what the closing file follows, and whatever it does not say gets settled by custom and by the escrow officer asking both sides.

Three practical consequences follow:

1. Read the settlement costs section before you sign anything. It is short. It is also the only place this question is genuinely answered for your transaction.
2. If you want a different split, ask for it as part of the offer, not after you are under contract. It is a price term. Moving it later means reopening the negotiation.
3. Do not assume your closing statement is wrong because it does not match an article you read. It may simply be matching a contract you agreed to.

If your settlement statement does not match what you thought you agreed to, call your escrow officer and ask them to read the contract line back to you. That is a normal question and it takes two minutes.

What an owner's policy costs

An owner's policy on a typical Utah home runs roughly $1,000 to $3,000, depending mainly on the purchase price. It is a one-time charge, paid at closing — not an annual premium — and it stays in force for as long as you own the property.

Two things move the number:

• The amount of coverage. Owner's policy coverage is normally written for the purchase price, so a more expensive house means a larger policy.
• The kind of policy. An extended or enhanced homeowner's policy covers more than a standard one and costs more than a standard one.

Rates for title insurance in Utah are filed with the Utah Insurance Department rather than quoted freehand, so you should expect the premium on a given coverage amount to be consistent and explainable. If a number on your statement is not clear, ask what coverage amount it was calculated on.

The premium is also not the whole title and escrow line on your statement. There are separate charges for the closing itself, for recording, and sometimes for endorsements the lender asks for. Those are covered on Utah closing costs.

When the usual split changes

The customary split is a starting point. Here are the situations where it most often moves, and none of them is unusual:

A competitive market. When sellers have several offers, buyers offer to pick up costs the seller would normally carry — including the owner's policy. When the market cools, it goes the other way and buyers ask for concessions.

New construction. Builders frequently have their own arrangements and their own preferred title company, and their contracts often allocate costs differently from a resale. Builder contracts are also usually the builder's own form rather than the standard state form, so the customary answer is a weaker guide than usual.

For-sale-by-owner. With no agent drafting from a familiar form, allocation of costs is more often improvised. That is the case where reading the contract carefully matters most.

Seller concessions. A seller crediting the buyer's closing costs may end up paying for the lender's policy in substance even though the line item still sits on the buyer's side of the statement.

A cash sale. No loan means no lender's policy. See buying with cash below.

Can the other side pick the title company?

Under federal law, a seller cannot require a buyer to use a particular title insurance company as a condition of the sale where the buyer is paying for the policy. That rule comes from the Real Estate Settlement Procedures Act, and it exists precisely because whoever pays should be able to choose.

In practice, two things follow:

• You may shop. Title agencies are not interchangeable on service, on responsiveness or on how they handle a problem the search turns up, even where the premium is similar.
• Buyer and seller do not have to use the same company. Each side can bring its own agency and the two coordinate the closing. The industry calls that a split closing and it is a normal, workable arrangement — it needs more coordination, not less goodwill.

If you would like us to quote your file, get in touch and tell us the address and the contract date.

Buying with cash

With no mortgage there is no lender's policy, because there is no lender to protect. That leaves one decision: whether to buy an owner's policy at all.

Nobody will require you to. A cash buyer who skips it saves the premium and takes on personally every risk the policy would have covered — and has no lender standing behind them who ran their own check. The cash buyer is the buyer with the most exposure to a title defect, not the least, because there is no second party with a reason to catch the problem.

It is your call, and it is worth making deliberately rather than by default because the line was not on the statement.

What to check before you sign

• The settlement costs section of your contract. Confirm it says what you think you agreed to for both policies.
• Which policy is which on your statement. "Owner's policy" and "lender's policy" are separate lines. If you only see one, ask why.
• Whether you are being offered a standard or an extended owner's policy, and what the difference costs.
• The coverage amount. Your owner's policy should normally be written for the purchase price.
• Who is paying for what, in writing, before closing day. A surprise on the statement at the signing table is a bad time to start negotiating.

Questions we get asked

Is title insurance required in Utah?

An owner's policy is not required by law. A lender's policy is effectively required if you are borrowing, because lenders require it as a condition of the loan.

Do I have to pay it every year?

No. It is one premium, paid at closing, and the owner's policy lasts as long as you own the property.

I already have an owner's policy. Do I need a new one to refinance?

No. Your owner's policy is not affected by refinancing. Your new lender will require a new lender's policy, which is a separate thing — see Utah refinance closings.

The seller is paying. Does that mean the policy protects the seller?

No. Who pays and who is protected are two different questions. The owner's policy protects the buyer even when the seller pays for it.

What if the buyer and seller cannot agree on who pays?

Then it stays a negotiation, like any other term. Escrow does not decide it; the contract does.

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Still not sure how this lands on your file? Call us at +1 (801) 266-0606 or send us the details and we will walk your statement through with you line by line.