What Is Title Insurance and Do I Need It?
A clear breakdown of owner's vs. lender's policies, what they cover, and why Texas requires it.
Title insurance protects you against financial loss from problems with a property's title — the legal record of who owns it. Unlike car or home insurance, which cover future events, title insurance protects against issues that already exist in the property's history but weren't discovered until after you bought it.
Owner's policy vs. lender's policy
There are two policies, and they protect different people:
- An Owner's Policy protects you, the buyer, and your equity in the home for as long as you (or your heirs) own it.
- A Lender's (Mortgagee) Policy protects your mortgage lender's interest and is almost always required when you finance a purchase.
What it covers
A title policy can protect you from things like undisclosed liens, unpaid property taxes, errors or fraud in past deeds, forged signatures, undisclosed heirs, and mistakes in the public record. If a covered claim arises, your title company defends your ownership and covers losses up to the policy amount.
A one-time cost
Title insurance is a one-time premium paid at closing — there are no annual renewals. In Texas, premiums are set by the state (promulgated), so every title company charges the same amount for the same coverage. Coverage lasts as long as you own the property.
Bottom line: an owner's policy is one of the least expensive forms of protection you'll buy for one of the largest purchases you'll make. We're happy to walk you through your specific transaction.
Have questions about your closing?
Our team is happy to walk you through your specific transaction — usually within one business day.