How Title Insurance Works

Title insurance protects property owners and lenders from potential issues with a property's title. When you buy a home, it ensures that your ownership rights are secure. Unlike other insurance types, title insurance covers past events that could threaten ownership. An Owner's Title Policy (OTP), purchased at closing, offers lifetime coverage, safeguarding against claims related to ownership disputes, liens, or other title defects.

Owner’s Title Policy (OTP)

OTP is essential because it protects against problems that may have existed before you acquired the property. These issues could include unpaid property taxes, undisclosed heirs, or fraud. Without OTP, any of these could cost you money or even result in losing your property. OTP involves a one-time payment made at closing, with coverage lasting as long as you or your heirs own the property.

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Survey Deletion Endorsement

A Survey Deletion Endorsement is a beneficial add-on to OTP. When purchasing property, title insurance usually has an exception for issues arising from surveys, like boundary disputes. The Survey Deletion Endorsement removes that exception, covering issues revealed by a survey. For example, if a fence crosses your property line or there’s an unrecorded easement, this endorsement helps protect against related financial losses.

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Other Common Endorsements

In addition to the Survey Deletion Endorsement, there are additional endorsements that offer further protection depending on your needs. Some commonly sought-after endorsements include:

Mineral Rights Endorsement: Covers losses due to third-party claims on mineral rights, preventing unanticipated disruptions to the property. 

T-19.1 Endorsement: Protects against damage from recent improvements like sheds or patios that might not be on public record.

Access Endorsement: Ensures that the property has access to public roads, which is especially useful for rural or undeveloped properties.

Cost of Title Insurance in Texas

The cost of title insurance in Texas is regulated by the Texas Department of Insurance (TDI), which sets standard rates that all title companies follow. These rates are based on the property's sale price and ensure consistent pricing across the state. Since the rates are regulated, you won’t need to shop around for lower prices, as they will be the same statewide. For a detailed look at the rates, you can visit the TDI Title Insurance Rates page.

FAQs

What is the difference between Owner’s Title Policy and Loan Policy? 

Owner’s Title Policy protects the homeowner, while Loan Policy protects the lender’s interest in the property until the loan is paid off.

Do I need a Survey Deletion Endorsement?

If you’re concerned about potential boundary disputes or issues that could arise from property surveys, a Survey Deletion Endorsement is advisable.

How long does title insurance last?

Owner’s Title Policy lasts as long as you or your heirs own the property, making it a one-time purchase with lasting benefits.

What does the Mineral Rights Endorsement cover?

This endorsement protects against claims or damages resulting from third-party ownership of mineral rights, which can impact property use and value.

Why are endorsements added to title insurance?

Endorsements provide extra protection for specific concerns that standard title insurance may not cover, giving you more peace of mind about potential risks​