What is title insurance?
Title insurance is a very unique insurance policy that protects your ownership in real property. Unlike other policies, title insurance protects the owner from past errors related to ownership history rather than future risks such as fire, flood or other physical damages. Title coverage is based on the careful research of past ownership records and is designed to address any overlooked or outstanding issues prior to your taking possession of your property.
Why should you have title insurance?
The behind-the-scenes work of the title company promotes and ensures an efficient and secure transfer of real estate from the seller to the buyer. Title insurance doesn’t guarantee that you will never have a problem, but it does give you the assurance and peace of mind that the title company will be there to address a problem if there is one. Unlike other types of insurance, the premium for your title policy is paid only once, and your policy remains in effect as long as you own the property. A title policy is your guarantee that the home you are buying is protected from covered title problems.
What's different about title insurance in Texas?
Like all lines of insurance, title is highly regulated by the government. In Texas, the Department of Insurance is the state agency charged with oversight of title insurance. In fact, Texas has the most tightly regulated title insurance industry in the United States. Both rates and forms are standardized, meaning the language of the policy is the same, regardless of the title company (also known as an underwriter) issuing the policy, and the premium amount charged for the policy is the same no matter which title insurance agent you choose.
When you purchase a title policy in Texas, you should know that the rates, terms and coverages are set by the Texas Department of Insurance, and all title professionals are legally bound to those requirements. Because title professionals can’t compete on price or product, they must compete on the quality of service they provide.
May I choose the title agent or the insurer that underwrites my title policy?
Yes. In Texas, the premium rates for title insurance are set by the commissioner of the Texas Department of Insurance. Because these rates are the same for all policies, agents do not compete on price, but on service.
Who is responsible for payment of the owner's policy?
Although negotiable, it is customary for the property seller to pay for the owner's policy.
Who is responsible for payment of the loan policy?
As with the owner's title policy, responsibility for payment is negotiable, though it is usually the borrower/buyer who pays for the loan policy.
Is there a mortgage, transfer or other tax imposed on Texas real estate transactions?
Where can I find additional information about the regulation of title insurance in Texas?
*Information on this website is not intended as legal advice. Title Insurance Coverage may vary by state.