If it is not likely that the buyer -- your applicant -- will incur or pay a premium for owner's title insurance (OTI), you don't have to include that cost -- even with the "(Optional)" label -- in Section H of the loan estimate.
However, if OTI is always a seller's cost in your market, you might decide that it's a more accurate presentation of costs to include an estimate of the incremental premium cost for OTI and a seller credit for the full OTI premium if there is a simultaneous issuance discount provided for the lender's title insurance (LTI). That will have the net effect of reducing the cash due at closing, making it less than if you omitted any reference to OTI.
In other words, omitting the OTI amounts from the LE would tend to make your estimate of loan costs more expensive than a competitor's estimate that does include the OTI amounts, assuming all costs are otherwise the same. If an applicant happens to be shopping those costs, your loan estimate could create a disadvantage for you.
John S. Burnett
Fighting for Compliance since 1976
Bankers' Threads User #8