Shopping for insurance can be confusing. Most people shop based on price, but choosing the right coverage and company are important, too.
Learn the Basics. It’s important to understand your options before you shop. See The Basics section to learn about common title insurance coverages.
The Three C’s of Shopping:
Cost, Coverage, and Customize
The price you pay for title insurance is set by the Texas Department of Insurance (TDI). It includes the cost of the title search and examination, closing, and issuing the policy. The premium is based on the property’s sale value.
*️⃣ Usually, the borrower/buyer pays for both the owner’s and lenders/loan policies.
Title policy forms in Texas are standardized. This means coverage is the same or uniform from policy to policy.
Most kinds of additional coverage are required by the lender as part of the lender policy. Additional coverage options for owner policies exist but are limited. One example: An owners policy only covers the value of your property at the time you buy it. You may buy an “increased value endorsement” that covers the increase in your property’s value.
Other Things to Think About
Agents – Title insurance agents will identify problems with the title that need to be corrected before you buy your home or property. Agents check for problems with your title by looking at public records, including deeds, mortgages, wills, divorce decrees, court judgments, tax records, liens, encumbrances, and maps.
*️⃣ You may pick any title agent you want. You don’t have to use the agent the real estate company or lender recommends.
*️⃣ Make sure the agent you use is licensed. It’s illegal to sell title insurance without a license.
Terms to Know
Closing costs – the amount you pay to complete a property sale or purchase. Closing costs may include a down payment, taxes, fees, title insurance, and real estate commissions.
Heir – a person with a legal right to inherit property.
Lender – an organization or person that lends money. For example, a bank is a lender.
Lien – a right to keep possession of property owned by another person until a debt is paid off.
Premium – the amount you pay for title insurance.
Policy – a contract between you and the insurance company. The policy tells you what’s covered and what the insurance company is required to pay.