What is Title Insurance in Texas?
Title insurance in Texas is a form of insurance that protects buyers and lenders in Texas from financial liabilities that might arise due to a faulty title or hidden liens associated with the property. There are two types of Texas title insurance policies: Lender’s and Owner’s. For a more detailed overview of title insurance, watch our title insurance explained video we put together.
Texas title insurance policy premiums are added as line items within a closing costs worksheet for a buyer and seller such as a Closing Disclosure, Loan Estimate, HUD-1, or an ALTA Settlement Statement. If you're looking to get a preview of what these costs look like, use this free Texas title policy calculator.
What is an Owner's Title Policy in Texas?
An owner's title policy in Texas protects the buyer of the property from problems arising out of any defects in the title of the property including ownership disputes and liens. Generally speaking, the owner's title policy protects the owner of the property up to the full value of the property when the policy was issued.
What is a Lender's Title Policy in Texas?
A lender's title policy in Texas protects the lender of a property from issues issues arising out of defects in the property's title. The borrower is generally required to purchase and pay for a lender's title insurance policy during a financed real estate transaction.
Should you shop for title insurance in Texas?
While title insurance premiums are the same across all title insurance providers in Texas, title and settlements fees can vary significantly from one provider to the next. Example title and settlement fees include:
- Search or Survey Fees - Charged for conducting a title search or survey on a property
- Document Preparation Fees - Charged for preparation of various closing documents including an ALTA Settlement Statement
- Technology Fees - Charged to offset costs of technology such as eSignature, eClosing, and other settlement platforms
- Courier Fees - Charged to offset costs associated with delivering documents across transaction participants
In light of this fact, the CFPB strongly recommends consumers shop and compare settlement costs (including title insurance) across multiple providers before picking the best one. In fact, both the Closing Disclosure and Loan Estimate have explicit sections for services the borrower can shop for, and title and settlement services is one of them.
Is owner's title insurance a one time fee?
Yes, in Texas, unlike other types of insurance, the owner's title insurance policy premium is a one-time fee which is typically paid during the settlement of a real estate purchase transaction. Prior to issuing the policy, the issuing agent of the owner's title insurance policy should thoroughly conduct a title search on the property to ensure no defects exist (or cure all defects if any exist). This step helps minimize the chance of any title claims arising in the future.
How long is title insurance good for in Texas?
Generally speaking, in Texas, the lender's title insurance policy is good until the mortgage is paid off in full, whether by the borrowers directly or through a refinancing transaction. A Texas owner's title insurance policy, on the other hand, is valid for as long as the owner(s) and their heir(s) hold and retain an interest in the property.
What title insurance does not cover in Texas?
Title insurance does not protect you against the condition of the home such as the state of the appliances, presence of wood destroying organisms such as termites, radon gas, dry-rot, mold, or any changes to title of the property such as liens after the closing date of the transaction.
However, if something happens to the title of the property after the closing date that was related to something that occurred before the closing date, then then the title insurance underwriter may be responsible for compensating (or curing) the issue.
Who sets title policy premiums in Texas?
Title insurance policy costs are regulated and also set by the Texas Department of Insurance (TDI) in collaboration with a group of title insurance underwriters that operate in the state. The state sets eight defined premium tiers based on the price of the property or the loan in increments of $1,000 that you can see on this page below. The formula to calculate title insurance premiums applies to all the counties in Texas.
How much is a title policy in Texas?
The cost of a title policy in Texas can range from 0.9% to 0.6% of the property value. Generally speaking, the higher the property value, the lower the cost of the Texas title insurance policy on that property. For example, the cost of a Texas title policy is around $832 for a $100,000 property, $1,359 for a $200,000 property, $2,413 for a $400,000 property.
How much is a typical title policy in Texas?
Below, we have computed Texas title insurance policy costs for a few typical scenarios to help you estimate your costs:
- For a purchase price of a $200,000 property in Texas with 20% down payment ($40,000), the cost of title insurance owner's policy and lender's policy are $1,359 and $100 respectively.
- For a purchase price of a $200,000 property in Texas bought with full cash, the cost of title insurance owner's policy is $1359.
- For a purchase price of a $500,000 property in Texas with 20% down payment ($100,000), the cost of title insurance owner's policy and lender's policy are $2,940 and $100 respectively.
- For a purchase price of a $200,000 property in Texas bought with full cash, the cost of title insurance owner's policy is $1359.
- For a purchase price of a $1,000,000 property in Texas with 20% down payment ($200,000), the cost of title insurance owner's policy and lender's policy are $5,575 and $100 respectively.
- For a purchase price of a $200,000 property in Texas bought with full cash, the cost of the title insurance owner's policy is $5,575.
If you're looking for an exact rate, use our calculator above or the tables and formulas below to calculate your title insurance policy premiums.
Texas Title Insurance Basic Premium Rates
For properties valued below $100,000, use the following table to calculate your Texas title insurance policy premiums:
| Policies Up To And Including | Basic Premium | Policies Up To And Including | Basic Premium | Policies Up To And Including | Basic Premium | Policies Up To And Including | Basic Premium |
|---|---|---|---|---|---|---|---|
| $25,000 | $328 | $44,000 | $456 | $63,000 | $583 | $82,000 | $711 |
| $25,500 | $331 | $44,500 | $459 | $63,500 | $587 | $82,500 | $716 |
| $26,000 | $335 | $45,000 | $463 | $64,000 | $591 | $83,000 | $720 |
| $26,500 | $338 | $45,500 | $466 | $64,500 | $594 | $83,500 | $722 |
| $27,000 | $340 | $46,000 | $469 | $65,000 | $597 | $84,000 | $725 |
| $27,500 | $343 | $46,500 | $473 | $65,500 | $600 | $84,500 | $729 |
| $28,000 | $347 | $47,000 | $475 | $66,000 | $604 | $85,000 | $732 |
| $28,500 | $350 | $47,500 | $478 | $66,500 | $609 | $85,500 | $735 |
| $29,000 | $355 | $48,000 | $483 | $67,000 | $612 | $86,000 | $738 |
| $29,500 | $358 | $48,500 | $487 | $67,500 | $613 | $86,500 | $743 |
| $30,000 | $361 | $49,000 | $490 | $68,000 | $617 | $87,000 | $747 |
| $30,500 | $364 | $49,500 | $493 | $68,500 | $621 | $87,500 | $749 |
| $31,000 | $368 | $50,000 | $496 | $69,000 | $624 | $88,000 | $752 |
| $31,500 | $371 | $50,500 | $499 | $69,500 | $627 | $88,500 | $756 |
| $32,000 | $374 | $51,000 | $501 | $70,000 | $631 | $89,000 | $760 |
| $32,500 | $378 | $51,500 | $505 | $70,500 | $635 | $89,500 | $762 |
| $33,000 | $381 | $52,000 | $510 | $71,000 | $639 | $90,000 | $765 |
| $33,500 | $385 | $52,500 | $514 | $71,500 | $641 | $90,500 | $769 |
| $34,000 | $388 | $53,000 | $516 | $72,000 | $644 | $91,000 | $773 |
| $34,500 | $392 | $53,500 | $520 | $72,500 | $648 | $91,500 | $777 |
| $35,000 | $395 | $54,000 | $523 | $73,000 | $651 | $92,000 | $779 |
| $35,500 | $398 | $54,500 | $526 | $73,500 | $654 | $92,500 | $783 |
| $36,000 | $401 | $55,000 | $529 | $74,000 | $658 | $93,000 | $786 |
| $36,500 | $405 | $55,500 | $532 | $74,500 | $662 | $93,500 | $790 |
| $37,000 | $408 | $56,000 | $537 | $75,000 | $666 | $94,000 | $791 |
| $37,500 | $412 | $56,500 | $540 | $75,500 | $668 | $94,500 | $796 |
| $38,000 | $416 | $57,000 | $543 | $76,000 | $671 | $95,000 | $801 |
| $38,500 | $419 | $57,500 | $547 | $76,500 | $674 | $95,500 | $804 |
| $39,000 | $421 | $58,000 | $551 | $77,000 | $678 | $96,000 | $805 |
| $39,500 | $425 | $58,500 | $553 | $77,500 | $681 | $96,500 | $809 |
| $40,000 | $428 | $59,000 | $556 | $78,000 | $685 | $97,000 | $813 |
| $40,500 | $433 | $59,500 | $560 | $78,500 | $689 | $97,500 | $817 |
| $41,000 | $435 | $60,000 | $564 | $79,000 | $693 | $98,000 | $820 |
| $41,500 | $439 | $60,500 | $568 | $79,500 | $694 | $98,500 | $824 |
| $42,000 | $442 | $61,000 | $571 | $80,000 | $698 | $99,000 | $827 |
| $42,500 | $446 | $61,500 | $573 | $80,500 | $702 | $99,500 | $830 |
| $43,000 | $448 | $62,000 | $577 | $81,000 | $706 | $100,000 | $832 |
| $43,500 | $452 | $62,500 | $581 | $81,500 | $708 |
For properties valued at above $100,000, the Texas Department of Insurance has defined seven different rate tiers (effective as of Sep 1, 2019). Also note that these title insurance policy rates may change every year:
| Property Value | Cost per $1,000 |
| $100,001 - $1,000,000 | $5.27 |
| $1,000,001 - $5,000,000 | $4.22 |
| $5,000,001 - $15,000,000 | $3.57 |
| $15,000,001 - $25,000,000 | $2.54 |
| $25,000,001 - $50,000,000 | $1.52 |
| $50,000,001 - $100,000,000 | $1.38 |
| Above $100,000,000 | $1.24 |
How is title insurance calculated in Texas?
Title insurance policy costs set by the Texas Department of Insurance (TDI) which defines rates for properties under $100,000 and tiers for properties valued above $100,000. If your Texas property is valued at $100,000 or less, use the table above to calculate your price. If your Texas property is valued at $100,000 or more, follow the steps below:
- Determine the exact value of your Texas property (eg. $400,000)
- Determine the right Policy Range in the table below using column (1) based on your property value (eg. Row 1 between $100,001 and $1,000,000)
- For the Policy Range applicable to your property, subtract the value in column (2) from the property value (eg. $400,000 - $100,000 = $300,000)
- Multiply the result in Step 3 by the value in column (3) of the applicable Policy Range, and round to the nearest dollar (eg. $300,000 x 0.00527 = $1,581)
- Add the value from column (4) to the amount you have computed in Step 4 (eg. $1,581 + $832 = $2,413)
- The amount in step 5 above is your Texas title insurance policy cost
| (1) Policy Range |
(2) Subtract |
(3) Multiply by |
(4) Add |
| $100,001 - $1,000,000 | 100,000 | 0.00527 | $832 |
| $1,000,001 - $5,000,000 | 1,000,000 | 0.00433 | $5,575 |
| $5,000,001 - $15,000,000 | 5,000,000 | 0.00357 | $22,895 |
| $15,000,001 - $25,000,000 | 15,000,000 | 0.00254 | $58,595 |
| $25,000,001 - $50,000,000 | 25,000,000 | 0.00152 | $83,995 |
| $50,000,001 - $100,000,000 | 50,000,000 | 0.00138 | $121,995 |
| $100,000,000+ | 100,000,000 | 0.00124 | $190,995 |
What is the simultaneous issue discount in Texas?
If both an Owner's and Lender's (ie. Loan) title insurance policies are issued during a real estate transaction, the Lender's title insurance policy is eligible for a simultaneous issue discounted rate of $100 as long as the liability amount for the lender's title insurance policy does not exceed that of the owner's title insurance policy.
What is an R-8 credit in Texas?
An R-8 credit in Texas is when a new lender's title insurance policy is issued to renew, extend or satisfy an old mortgage that is already insured by a Texas lender's title insurance policy. Generally, this credit is applicable during refinance transactions.
Who usually pays for the title policy in Texas?
Traditionally, the seller pays for the owner's title policy in Texas as a courtesy to the buyer, and the buyer pays for the Texas lender's title policy costs. However, as with all closing costs, who pays for the title policies can be duly negotiated by the buyer and seller during the sale of a property. In the case of new construction developments, those released by large home builders, typically, the buyer is responsible for paying all title insurance costs.