Title Insurance in New York: Who Each Policy Protects and How the Price Is Set

Although a homebuyer in New York generally pays for two title insurance policies at closing, only one of them protects the buyer.

The first is the lender’s policy, which exists for the bank. The second is the owner’s policy, which exists for whoever holds the deed. Both show up as lines on a closing statement, often in the same block and often with similar-sounding names, which is part of why the difference gets lost. What follows covers what each policy does, how the state regulates the price, which discounts the rate manual allows, and what changed in October 2024, with the sources named throughout so each figure can be checked.

Two policies, two beneficiaries

The New York State Department of Financial Services (DFS) describes the lender’s policy as protection for the lender, usually in the amount of the loan, with coverage that shrinks as the loan is paid down. The owner’s policy protects the buyer up to the original sales price and does not decline over time. DFS adds that an optional market value endorsement can keep that coverage in line with rising property values.

The American Land Title Association (ALTA) frames the owner’s side in terms of duration and cost. According to its homeowner FAQ, an owner’s policy lasts as long as the buyer or the buyer’s heirs own the property, it is a one-time fee, and a typical policy costs about 0.5 percent of the purchase price. That last figure is a national industry number, not a New York quote, so a Long Island buyer’s actual premium can differ. The same document says a lender’s policy is usually required by the lender and protects only the lender’s financial interests.

One consequence is easy to overlook. A refinance comes with a new lender’s policy, and DFS confirms it protects only the lender, but an owner’s policy bought at the original purchase continues to cover the owner. The reverse also holds. According to a DFS consumer FAQ, longtime owners who bought without an owner’s policy generally cannot buy one later, because title insurers usually do not issue policies after the title has transferred.

What the insurance is for

Before a sale closes, a title search examines the historical public record: deeds, court records, and property and name indexes. Title insurance covers what that search does not catch. DFS lists fraud, forgery, unpaid real property taxes, judgments, liens, and other encumbrances among the examples of hidden defects. ALTA adds that an owner’s policy can cover legal costs when a claim is made against the owner’s property rights.

On Long Island, two kinds of records tend to matter more than the rest. The first is the survey, which shows boundaries and what stands on them; how to read one is covered in How to Read a Waterfront Lot Survey Before You Make an Offer. The second is the deed itself, since restrictions written into post-war deeds have collided with lending rules before, as described in The Hidden Clause: How Nassau County’s Post-War Deed Covenants Have Quietly Collided With FHA Rules. DFS also names unpaid real property taxes among the hidden defects an owner’s policy addresses, and the tax side of a closing is laid out in How Property Taxes Work in Suffolk County.

How New York sets the price

Title insurance premiums in New York are not set by each company independently. In a January 2018 statement, DFS Superintendent Maria T. Vullo said the Insurance Law requires every title insurer to submit its rates to DFS for approval, and that rates must not be excessive, inadequate, or unfairly discriminatory. Most insurers use the rates filed by the Title Insurance Rate Service Association (TIRSA), the industry’s rate service organization, though DFS notes that an insurer may file its own. At the time of that statement only two insurers did.

TIRSA publishes its rates in a rate manual, and the manual divides the state into zones. Nassau and Suffolk are both in Zone 2, where the rate includes the search and one tax-lot search. The manual prices policies using what it calls bracketed rates, which are keyed to the amount of insurance. The rate tables themselves could not be read from the copies reviewed for this post, so no dollar premiums are shown here. A written quote from a title company or the closing attorney is the dependable figure.

DFS has put some numbers on the record, all dated. In the 2018 statement it cited a premium of $1,291 before ancillary fees for a $200,000 home with 20 percent down in Zone 2, compared with $875 in Connecticut. It also reported that New York title insurers wrote more than $1.1 billion in premiums in 2016, of which about $51 million went to claims and losses. Those figures are nearly a decade old and predate the current rate manual, but they show what the regulator considered the relevant measures at the time. The same statement flagged markups on ancillary fees and pointed to Regulation 208 as the rule addressing them, which is the reason an itemized quote is worth requesting.

The discounts written into the rate manual

Several price reductions are built into the manual’s rules, and most of them depend on how the policies are bundled or on what the property was insured for before. The table summarizes the ones that apply most often to residential closings.

Situation	What the rate manual provides	Where it appears
Owner’s and lender’s policies issued together	Lender’s policy charged at 30% of the loan rate, up to the owner’s policy amount; the full loan rate applies to any excess	Section 10(B)
Refinance, property insured within the past ten years	Discounted premium; 50% of the bracketed rate for amounts of $475,000 or less, 70% above that	Section 12
Refinance, same lender and same borrower, owner-occupied 1–4 family	70% of the refinance rate	Section 12A
Refinance, new lender and same borrower, owner-occupied 1–4 family	85% of the refinance rate	Section 12B
Loan modification with no new money	50% of the bracketed rate	Section 13
Owner’s Extended Protection	120% of the owner’s rate; residential property held by an individual or a living trust for estate planning	Section 20

The first row is the one most buyers meet. DFS describes the same rule from the consumer side: when both policies are issued at the same closing, the owner’s policy carries the full rate and the lender’s policy is charged at 30 percent of the applicable loan rate. The details that decide eligibility, including the ten-year lookback on refinances, are in the manual itself, which is published by TIRSA.

What changed on October 1, 2024

The seventh revision of the rate manual took effect on October 1, 2024. The Long Island Land Use and Zoning blog flagged it ahead of time: “The newly revised TIRSA Rate Manual goes into effect on October 1, 2024”. That post and a law firm’s client summary describe the main changes.

• The 2021 ALTA owner’s and loan policy forms replaced the 2006 forms.
• Affirmative coverage that used to be added at no fee was prohibited unless it comes through an approved endorsement.
• New endorsements became available in New York, and some existing ones were amended or withdrawn.
• Pricing for certain endorsements now differs depending on whether the land is residential or commercial.

The blog post expects title costs to rise, since coverage that was previously free now arrives as a paid endorsement, and it notes that some endorsements may call for extra searches or survey work. The law firm’s summary adds that survey readings remain available but may be limited to boundary and lot-line exceptions without describing improvements. Both are expectations, not measured price changes. A trade-press account by a Fidelity National Title executive confirms a host of changes to the manual’s definitions and rules but gives no consumer cost figures, and none of the three accounts mentions a change to the base premium tables, which could not be checked directly. Title reports and invoices obtained before October 1, 2024 may have needed amendment, according to the blog post, and both sources say lenders may have had to update their cost disclosures for loans already in progress. The broader accounting of those costs is in What Closing Costs Actually Look Like on Long Island and the loan-side steps in The Mortgage Commitment Letter Is Not a Loan Approval.

Questions to put to the title company or attorney

None of these requires special knowledge, and each has a factual answer that can be written down.

• Is the quote itemized, with the premium separated from search, recording, and other ancillary fees?
• Is the owner’s policy written at the full purchase price, and is a market value endorsement available?
• Has the simultaneous issue discount been applied to the lender’s policy?
• Which endorsements are included under the current rate manual, and why does each one apply to this property?
• For a refinance, has the property been insured within the past ten years, and does that make the discounted rate available?
• If Owner’s Extended Protection is offered, what does the endorsement itself say it covers? The rate manual prices it but the policy language is what counts.

Heirs selling an estate property meet a related set of closing questions, covered in Selling an Inherited House on Long Island: Probate, Taxes, and Timing.

This is for informational purposes only — consult a licensed attorney or financial advisor for your specific situation.

Questions buyers ask

Does the lender’s title policy protect the buyer?

No. DFS and ALTA both describe it as protection for the lender. Only an owner’s policy protects the buyer’s own interest in the property.

Who pays for title insurance in New York?

DFS states that the homebuyer is generally responsible for paying for both policies.

How long does an owner’s policy last?

According to ALTA, it lasts as long as the owner or the owner’s heirs hold the property.

Can an owner who skipped the policy buy one later?

A DFS consumer FAQ says generally not, because title insurers usually do not issue policies after the title has transferred.

Are the rates the same at every title company?

Most insurers use the rates TIRSA files, and DFS must approve all of them. An insurer can file its own, however, and fees outside the premium can still differ, so quotes are worth comparing.

Real estate markets change. For current listings and market data, contact Maison Pawli at maisonpawli.com/about/.

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Sources

• New York State Department of Financial Services, Title Insurance
• New York State Department of Financial Services, Homeowner and property FAQs (title insurance items)
• New York State Department of Financial Services, Statement of Superintendent Maria T. Vullo, public hearing on title insurance regulations (January 12, 2018)
• Title Insurance Rate Service Association, Title Insurance Rate Manual for New York State, Seventh Revision (PDF, effective October 1, 2024)
• American Land Title Association, The FAQs of Title Insurance for Homeowners (PDF)
• cullenllp.com, Significant Changes Being Made to Title Insurance Coverage and Costs in New York State (September 30, 2024)
• Long Island Land Use and Zoning, A Title Change Is Gonna Come
• Mann Report, Rate Manual Amendments Bring Change, Choices to the Marketplace (November 10, 2024)