FAQ2021-01-21T16:38:56-06:00

Below you will find the answers to our frequently asked questions. Feel free to submit your questions to us via our contact form if it is not listed here.

What is Title Insurance?2021-01-14T08:01:12-06:00

Title insurance insures against financial loss caused by defects in title to real estate. Title insurance companies defend against lawsuits attacking the title, or in the case of a covered loss, reimburse the insured up to the policy limit.

What does a title company provide?2021-01-12T06:48:00-06:00

A title company makes sure that the title to a piece of real estate is legitimate and then issues title insurance for that property. Title insurance protects the lender and/or owner against lawsuits or claims against the property that result from disputes over the title.

Do you really need title insurance?2021-01-12T06:48:43-06:00

Title Insurance for homeowners generally protects purchasers and existing owners of residential property against risks that could cause stress and financial loss in the future. These risks may not always be discovered before settlement and can be categorized as ‘known’ or ‘unknown’ risks.

Is it required?2021-01-12T06:49:35-06:00

Texas does not require title insurance. The lender will require you to buy a Loan Policy of Title Insurance to protect their interest.

What is the difference between a title commitment and a title policy?2021-01-12T06:50:04-06:00

The title commitment comes before closing; the title policy is issued after closing. The commitment says that a title company is willing to issue title insurance under certain conditions and if the seller fixes certain problems. The policy provides coverage for the property.

What does the title commitment do?2021-01-12T06:50:28-06:00

The title commitment lists any potential issues, exclusions, or exceptions. It alerts the buyer to issues that exist and could cause problems in the future. It does not guarantee that there are no current issues or that none will arise in the future. You should discuss how to clear potential issues with the title agent. You may wish to review potential issues with a lawyer.

Read the title commitment carefully as these items can become exclusions or exceptions under Schedule B of your policy. Exceptions and exclusions are items not covered by the policy

What types of policies are there?2021-01-12T06:51:06-06:00

There are two types of policies, owner’s policies, and loan policies.

Owner’s Policy

The owner’s policy protects you against losses from ownership problems that arose before you bought the property, but that was not known at the time you bought the property. For example, you could lose the title to your property due to fraud, errors or omissions in previous deeds, or forgery of a previous deed. The owner’s policy protects the buyer from the covered risks listed in the policy.

There are separate types of policies for commercial and residential property. The T-1 is commonly used for commercial property and undeveloped land. The T-1R is for most residential property.

For a complete list of covered risks in the T-1 policy, see the Covered Risks section of the owner’s policy.

For a complete list of covered risks in the T-1R policy, see the Covered Title Risks section of the residential owner’s policy.

Loan Policy

The loan policy is issued to the mortgage lender. It protects the lender’s interest in the property until the borrower pays off the mortgage. For a complete list of covered risks, see the Covered Risks section of the Loan Policy.

Can I get a discount on the price of my policy?2021-01-14T08:05:43-06:00

No. The premium rate is set by the Texas Department of Insurance. Each title agent is required to charge the same premium for a policy.

In Texas, the premium includes charges for additional services such as the title search, the title examination, and closing the transaction. You only pay the title policy premium once, at the closing of the sale. The buyer and seller may negotiate who pays the premium.

Do title companies charge the same policy premiums?2021-01-14T08:06:11-06:00

Yes. Title insurance rates in Texas are regulated. All title companies will charge the same premium for a policy. Rates are based on the property’s sale value. For example, the basic premium for a $50,000 property is $522, and the basic premium for a $100,000 property is $875.

What doesn’t a title policy cover?2021-01-14T08:06:43-06:00

A title policy generally won’t cover mistakes or defects, financial issues, or rights issues.

  • Defects that are created after the policy is issued.
  • Defects that you create, or of which you had knowledge.
  • Problems that arise because of your failure to pay your mortgage, or to obey applicable laws or restrictive covenants that were disclosed to you.
  • Certain taxes and assessments.
  • Losses resulting from rights claimed by someone else occupying the land. The title company may need to inspect the property. There may be a charge for the inspection.
  • Homestead, community property, or survivorship rights of a policyholder’s spouse. Texas homestead laws address the rights of a spouse or survivors of a property owner.
  • Claims from other people who may have certain rights if your property is near a body of water or has a river or stream flowing through it.
  • Condemned land, unless a condemnation notice appeared in the public record on the policy date or the condemnation occurred before the policy date.
  • Violations of building and zoning ordinances and other laws and regulations related to land use, land improvements, land division, and environmental protection.
  • Disclosed restrictive covenants limiting how you may use the property. Request copies of restrictions and have your attorney explain them.

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