Title Insurance in Texas
Title insurance is designed to protect the mortgage company from unknown or unseen defects in the
ownership of the property you are buying. Some insurance is optional but title insurance is not. The
cost of the policy is part of the closing costs in a real estate transaction. Usually, the closing will take
place in the office of the title company. Which title company you choose is up to you.
Title insurance will protect your lender in the event your ownership of the property is ever challenged in court.
If a title defect does exist, the title company will reimburse the lender for it's loss or up to the limitations of the
policy. The policy is in effect for the term of the loan.
Title companies are regulated and licensed by the state board of insurance. Any complaints will
be handled by this entity.
When your policy is presented be sure to read it carefully and check legal descriptions of the property
you are purchasing. The policy will describe it's limits, any exclusions or exceptions and any special
conditions that apply.
Generally the policy covers the owner and the lender unless you reject the owner's coverage in writing.
You don't have to buy the owner's policy but it is good protection for your interests.
Title insurance policy premiums are uniform across the state and only vary as to the quality of service
provided by the title company issuing the policy. Most of the cost of the policy goes to the research of
the abstracts and other records such as tax, lawsuit, mechanic's liens, etc. and provides insurance against a defect
in the chain of title due to such things as forgery or fraud somewhere back up the line. Essentially, title
insurance will protect you from problems of the past but will NOT protect you from defects caused by you or
those you allowed to happen. It will not pay for violations of ordinances or code restrictions or zoning problems.
To find out more about title insurance, visit the Texas online information site at www.tdi.state.tx.us
Thanks,
Rick Lockwood |
