Title insurance is not required by law, but it can protect you

Having title insurance means that you own the property and can sell it, rent it, or transfer ownership of the home. Title insurance protects you against problems when you need to obtain a title when you buy a property.

Title insurance companies check to see if a property’s title has problems and correct them before they release it to you. Some of these problems could be:

  • Property taxes that have not been paid.
  • Fraud or forgery of the previous deeds (the legal document used for the transfer of title).
  • An unknown spouse or heir who could claim the property.

If there is a dispute with your property afterwards, your title company will take care of resolving it.

If you are taking out a loan to purchase a property, your lender will require you to purchase a Title Insurance Loan Policy (PDF) to protect their interests.

Otherwise, for peace of mind, you could get an owner’s title insurance policy, which is valid for as long as you or your heirs own the property.

The Texas Department of Insurance sets premiums for title insurance policies sold in Texas, so the rates are the same for all title companies. Still, you should check out other title insurance companies. Make sure the title company is licensed and has good customer reviews. You should also review closing costs, which can vary by company.

What is title insurance? Why do I need it for my new home?

Title insurance protects you from title problems when you buy a property. These could be problems that existed before you made the purchase, such as: (1) property taxes that have not been paid, (2) fraud or forgery of the above documents, or (3) an unknown spouse or heir that you can claim property as owner.

Title insurance companies check to see if a title has problems to correct them before it is released to you. If there is later a dispute with your property, your title company will take care of resolving it.

It is not home insurance

  • Title Insurance: Protects your property as the owner. You pay the premium only once, at the closing of the sale of the property.
  • Homeowners Insurance: Protects you from losses due to fire, weather, other types of property damage, or theft. You pay a premium as a homeowner each year.

There are two types of title insurance policies.

  • The owner’s policy:  Protects the owner of the home. It is valid for as long as you own the property.
  • The loan policy:  Protects the rights of the lender. It is valid until the loan is paid off.

The policy is standard

  1. In Texas, the policy language is the same no matter which title company you use. Coverage begins immediately, but you won’t receive a paper copy of the policy until 30 days after you close on your property. Read the policy carefully and ask the insurance company questions if necessary. Keep the policy with your important home documents.

Rates are already set

  1. All companies in Texas charge the same rates for title insurance. There could be differences in the costs of closing expenses. The cost of the policy to the homeowner is based on the selling price of the property. The cost of a loan policy is based on the amount of the loan.

You can use any title company

  1. Your real estate agent, contractor, or lender may recommend a title company, but you can choose any company you like. Make sure the agents are licensed by the Texas Department of Insurance. To verify this:
  • Call the TDI Help Line at 800-252-3439.
  • Check the  reports page . Click on “Title / escrow licensing” (English only).

fraud alert

  1. Real estate transactions can be targets for wire transfer fraud. Follow these steps to protect yourself when making electronic transfers or payments:
  • Get the name, email address, and phone number of everyone involved in the transaction, including the real estate agent, lender, and title insurer.
  • Check the electronic payment instructions with your title insurance agent.
  • Beware of any email that asks you to reply immediately or tells you that your electronic payment details have been updated.
  • After an electronic payment, immediately confirm that it has been received.

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