The lender's policy is required on every mortgage and no lender waives it; the owner's policy is optional almost everywhere, and what it buys is cover for the defects a search cannot find, which is the whole of the tradeoff a cash buyer is weighing.
The question splits in two and only one half is genuinely open. Nobody is asked whether they want the lender's policy: it is a condition of the loan, priced into the closing costs, and the alternative is not getting the mortgage. The owner's policy is the one a buyer can decline, and declining it is a bet that the title search found everything there was to find.
The lender's policy is not the buyer's protection
The lender's policy insures the lender for the loan balance. If a claim against the title succeeds, the insurer makes the lender whole, and the buyer's equity goes with the house. That asymmetry is why the two policies exist separately, and it is the part buyers most often miss when they see a title insurance line on the loan estimate and read it as cover for themselves.
What the owner's policy covers that a search does not
A title search finds what is recorded. The policy covers what is not, or what is recorded wrongly, which is a short and specific list.
- Forgery and impersonation in the chain of title, including a deed signed by somebody posing as the owner.
- An undisclosed or missing heir with a claim to a property that passed by inheritance.
- Recording errors: an instrument indexed under a misspelled name, a legal description typed wrong, a release filed against the wrong parcel.
- A lien that was paid but never released, or one recorded somewhere the search did not reach.
- A prior owner's marriage that the record did not show, where a spouse's community property interest required a signature that was never given.
- Fraud in an earlier transaction that leaves a clean-looking record behind it.
What it does not cover
A defect the buyer already knew about and accepted, anything in the policy's exceptions (recorded easements, the association's covenants, mineral rights severed long ago), a boundary problem an accurate survey would have shown where no survey coverage was bought, zoning and permit questions, environmental conditions, and anything the insured creates after closing. The exceptions pages of the preliminary title report are the list of what the policy will not cover, and they are delivered while the title contingency is still open for that reason.
The cash buyer, and the shape of the decision
A cash buyer has no lender requiring anything, so the whole decision is theirs, and the exposure is larger rather than smaller: the entire purchase price is at risk instead of a loan balance, and there is no second insured party whose insurer would be fighting the claim alongside them. On a normal Clark County resale the question is quieter than it sounds, since custom already puts the owner's policy on the seller's side of the settlement statement.
The case against the policy is that claims are rare, the search does most of the work, and the premium is real money at a moment when cash is short. The case for it is that the loss is not partial: a successful claim can take the property, and the cost of defending one exceeds the premium many times over. Both are accurate statements about a low-probability, high-severity risk, and that shape is the decision rather than an answer to it.
Questions people ask
Do you need title insurance if you pay cash?
No lender is there to require it, so it is entirely optional on a cash purchase. The exposure runs the other way from what people expect: the whole purchase price is at risk rather than a loan balance, and no lender's insurer is defending the title alongside you.
What happens if you decline the owner's policy?
Escrow records the waiver in writing and the sale closes normally. A defect that surfaces later is then the owner's to defend and to clear at their own cost, and an unresolved one can make the property hard to sell or refinance until it is cleared.
Does title insurance cover boundary disputes?
A standard owner's policy generally excludes matters an accurate survey would disclose, which covers most boundary and encroachment questions. Extended and homeowner's forms, and survey coverage, take in more of it. The exceptions and exclusions pages of the specific policy are the answer for a specific file.