A type of insurance that insures either the buyer’s right to own and possess the property, or the lender’s security interest in the property. Typically the seller will pay for the buyer’s policy, and the buyer will pay for the lender’s policy. Why does the seller pay for insurance for the buyer? Because the seller is potentially liable under the warranty deed. So to protect the seller, the seller pays.
In Washington, title insurance plays an important role in the transaction. The insurance company is responsible for making sure title is “clear,” meaning there are no liens on the property.