Updated: October 26, 2026 · By Mark Dietel, Broker/Owner, Mark Dietel Realty · 6-minute read
Quick answer: In Indiana, the title section of the Indiana Association of REALTORS purchase agreement decides who pays for the owner's title policy, and the term is negotiable. In Mark Dietel Realty's experience around Indianapolis and Greenwood, sellers have commonly paid for the owner's policy and buyers for the lender's policy. Either side can agree to something different.
What we analyzed: the Consumer Financial Protection Bureau's guidance on owner's and lender's title insurance, RESPA Section 9 (12 U.S.C. 2608), and the title insurance section of the purchase agreement most Central Indiana agents use, as of October 2026.
Key takeaways
- No Indiana law decides who pays for the owner's title policy. The purchase agreement does.
- The owner's policy protects the buyer's ownership; the lender's policy protects the lender's loan.
- The Consumer Financial Protection Bureau calls the owner's policy optional, while most lenders require a lender's policy.
- The exact charge depends on the sale price, the title company and the underwriter. Get it in a written estimate.
Who usually pays for the owner's title policy in Indiana?
In Central Indiana, the seller has commonly paid for the owner's title insurance policy, as a way of showing the buyer the title is clean. That is a local custom. No Indiana law requires it. The purchase agreement spells out who pays, and buyers and sellers in Marion and Johnson County negotiate it like any other term.
What this guide adds: who pays for the owner's policy and who picks the title company are separate terms in an Indiana purchase agreement. Under RESPA Section 9 (12 U.S.C. 2608), a seller cannot require a buyer with a federally related mortgage to use a particular title company. Title insurers file their rates and policy forms with the Indiana Department of Insurance, so the charge comes from the company's written estimate.
The Indiana Association of REALTORS purchase agreement has a title insurance section where the parties state who pays for the owner's policy.
Our pillar guide How Do I Choose a Title Company in Indianapolis? covers who picks and what to ask before you choose. Want to see your own numbers? Call Mark Dietel Realty at (317) 426-9911.
What is the difference between an owner's policy and a lender's policy?
An owner's title policy protects the buyer's ownership of the house against covered claims from before they bought it. A lender's title policy protects the mortgage lender's loan. The Consumer Financial Protection Bureau says most lenders require the lender's policy, while the owner's policy is optional for the buyer.
What is the difference between an owner's policy and a lender's policy?
| Owner's title policy | Lender's title policy |
|---|---|
| Who it protects | The buyer, as the new owner |
| What it covers | Covered title claims against the owner's interest, up to the policy amount |
| Required? | Optional, per the CFPB |
| How long it lasts | As long as the owner or their heirs hold an interest in the property |
| Who commonly pays in Central Indiana | Often the seller; negotiable |
| Cash purchase? | Still available; worth weighing with your agent |
The CFPB also notes that buying both policies from the same provider at the same time typically costs less than buying them separately.
Is owner's title insurance required in Indiana?
No. Indiana does not require a buyer to purchase an owner's title policy, and the CFPB describes it as optional nationwide. In our experience, most Central Indiana buyers still get one, partly because the seller often pays for it. Skipping it means the buyer has no title insurance protecting their own equity if an old claim surfaces.
How does who-pays get negotiated in the purchase agreement?
Who pays for the owner's policy is negotiated the same way as the price and closing date: the buyer's offer proposes it, and the seller accepts, counters or rejects. Sellers sometimes trade it against other terms, and buyers sometimes ask the seller to pay as part of an offer instead of asking for a lower price.
Paying the owner's policy as the seller lowers your net by the policy charge and can make your terms easier for a buyer to accept. Asking the buyer to pay keeps that line off your net sheet, and the buyer may ask for a lower price or another concession instead. In our experience, when more homes are for sale at a buyer's price, buyers tend to ask for more. Sellers often suggest a title company, but under RESPA Section 9 a seller cannot require a buyer with a federally related mortgage to use a particular one.
Commissions and closing charges are negotiated too. Commissions are fully negotiable and are not set by law.
What does this look like in Central Indiana?
Here is a hypothetical example. A seller in Greenwood (46142) accepts a $310,000 offer on a two-story home. The buyer's offer asks the seller to pay for the owner's policy, and the buyer will pay for the lender's policy. The seller agrees and asks for a revised written net sheet.
What does this look like in Central Indiana?
| Seller net sheet line (example) | Where the amount comes from |
|---|---|
| Sale price | $310,000, from the purchase agreement |
| Mortgage payoff | The lender's payoff statement |
| Owner's title policy (seller paying, per the contract) | The title company's written estimate (enter yours) |
| Seller's share of title and closing charges | The title company's written estimate (enter yours) |
| Property-tax proration | County tax records and the closing date |
| Agent compensation | Your negotiated agent compensation (enter yours) |
| Estimated proceeds | Sale price minus the lines above |
If the title search later finds an old lien, clearing it is a separate seller cost from the policy itself. Our companion post Why Do Title Problems Delay Closings in Indiana? covers those problems and how to catch them early. For every line on the sheet, see What Is a Seller Net Sheet in Indiana and What Goes Into It?
When this doesn't apply
- New construction: Builders often use their own contract and title company, and the title terms may be set by the builder's form.
- Short sales and bank-owned homes: The lender selling the house may have its own rules about title charges.
- Transfers between relatives with no sale: A quitclaim or gift deed may not involve title insurance at all; an attorney is a better first call.
What to do next
Before you list, ask for a written net sheet that shows the owner's and lender's policies as separate lines, so you know what each choice does to your proceeds. Then decide with your agent how you want to handle that term when an offer arrives.
Prefer to talk? Call (317) 426-9911. Mark Dietel Realty has offices in Southside Indianapolis, Greenwood and Bloomington.
Read next
- How Do I Choose a Title Company in Indianapolis?
- Why Do Title Problems Delay Closings in Indiana?
- What Is a Seller Net Sheet in Indiana and What Goes Into It?
- What Happens After I Accept an Offer on My House in Indiana?
Frequently asked questions
Does Indiana have a set price for title insurance?
Indiana does not publish one statewide price for title insurance. Title insurers file their rates and policy forms with the Indiana Department of Insurance, and the charge depends on the underwriter, the title company and the policy amount. The reliable way to know your number is a written, itemized estimate for your sale.
Is the owner's policy a one-time charge?
Yes. An owner's title policy is paid once, at closing, and generally stays in effect as long as the owner or their heirs hold an interest in the property. There is no monthly or yearly premium, which is one difference from homeowners insurance, which renews every year.
Should a cash buyer get an owner's policy?
A cash buyer does not need a lender's policy, but the owner's policy still protects their ownership against covered claims from before the purchase. Since the cash buyer has no lender requiring a title search, the owner's policy is often their main reason to have one done. It is optional, so weigh it with your agent.
Can the seller and buyer split the owner's policy?
Yes. Indiana purchase agreements can state that the buyer and seller split the owner's policy, in equal shares or any other way they agree. The settlement statement then shows each side's portion. As with every negotiated term, put the arrangement in writing in the purchase agreement or a signed amendment.
This is general information, not legal or tax advice. Confirm your situation with a real estate attorney, your title company or a CPA.
Mark Dietel Realty — offices in Indianapolis (Southside), Greenwood and Bloomington, Indiana.
Sources
- Consumer Financial Protection Bureau, What is owner's title insurance?: https://www.consumerfinance.gov/ask-cfpb/what-is-owners-title-insurance-en-164/
- Indiana Department of Insurance, Bulletin 199 (title insurance rate and form filings): in.gov/idoi
- 12 U.S.C. 2608 (RESPA Section 9), title companies: https://www.law.cornell.edu/uscode/text/12/2608
