On the web page at https://www.irs.gov/publications/p530 in the section for expenses (not basis) titled, "non-deductible items" it states:
You cannot deduct any of the following items.
•Insurance (other than mortgage insurance premiums), including fire and comprehensive coverage, and title insurance.
Then in the section titled "Items added to basis" it states verbatim.
The following are some of the settlement fees and closing costs that you can include in the original basis of your home.
•Abstract fees (abstract of title fees).
•Charges for installing utility services.
•Legal fees (including fees for the title search and preparation of the sales contract and deed).
•Recording fees.
•Surveys.
•Transfer or stamp taxes.
•Owner's title insurance.
•Any amount the seller owes that you agree to pay, such as back taxes or interest, recording or mortgage fees, cost for improvements or repairs, and sales commissions.
Now in the exceptions section, it does exclude the property insurance for rental property from the above, but it does not exclude the "lenders" title insurance specifically. The only title insurance specifically and explicitly addressed (that I can find) is the owners title insurance.
