Texas Title Insurance: What Buyers Pay and Who Covers It

Discover how Texas title insurance protects your ownership rights and learn about the fixed premium costs and essential coverage details.

Texas Title Insurance: What Buyers Pay and Who Covers It

Closing documents and house keys on wooden table

Texas title insurance protects your ownership rights against defects that existed before you bought the property — forged deeds, unknown heirs, unpaid liens, recording errors — and pays for your legal defense if someone challenges your title. Under the March 1, 2026 TDI rate schedule, the basic premium for an owner’s policy on a $400,000 home is $2,262, and that figure is identical at every licensed title company in the state. Texas sets premiums by regulation, so you cannot shop for a lower rate on the base policy. What you can shop for is service, local expertise, and the non-regulated fees that vary by company.

$2,262 — the state-regulated owner’s policy premium on a $400,000 Texas home, effective March 1, 2026. Every licensed title company charges the same amount.

Key Takeaways

Texas title insurance premiums are state-regulated and identical across all licensed companies, so the $2,262 owner’s policy premium on a $400,000 home is fixed — your leverage is in service quality, endorsements, and non-regulated closing fees.

Point Details
Buy the owner’s policy It is optional but protects your equity against pre-existing defects for as long as you own the property.
Premiums are state-set Every licensed Texas title company charges the same basic premium; verify yours at the TDI rate schedule.
Review Schedule B before closing Exceptions listed there are not covered — resolve liens, easements, or HOA issues before signing.
Capture the simultaneous-issue discount Issuing the owner’s and lender’s policies at the same closing typically reduces the lender’s policy cost to $100.
Mogaverogroup’s closing support The team reviews title commitments and coordinates with Austin-area escrow partners to clear issues before closing day.

Table of Contents

What does title insurance cover in Texas?

Texas issues two types of title policies, and they protect different parties.

An Owner’s Policy (Form T-1 or T-1R for residential transactions) protects the buyer. If a covered title defect surfaces after closing, the owner’s policy pays for legal defense up to the policy limit and can compensate you for losses. Coverage lasts as long as you or your heirs hold an interest in the property. It is a one-time premium paid at closing, not an annual fee.

A Lender’s Policy (also called a Loan Policy or Mortgagee Policy) protects only the lender’s financial interest, up to the outstanding loan balance. It shrinks as the loan is paid down and disappears entirely when the mortgage is satisfied. It does nothing for the buyer’s equity.

What an owner’s policy typically covers

  • Forged or fraudulent deeds in the chain of title
  • Unknown heirs or undisclosed prior owners asserting a claim
  • Unpaid liens (contractor, mechanic, or tax liens) that weren’t discovered in the title search
  • Recording errors or clerical mistakes in public records
  • Boundary disputes or encroachments that predate your purchase
  • Easements or access rights not shown in the public record

Common exclusions and Schedule B exceptions

  • Zoning ordinances and land-use regulations
  • Physical property damage (fire, flood, structural defects — that is homeowners insurance territory)
  • Defects you created or knew about before closing
  • Matters specifically listed as exceptions in Schedule B of your title commitment

Texas uses promulgated policy forms — meaning the T-1 family of policy language is standardized statewide. Every licensed company uses the same base form, so the policy text itself is not a differentiator. The differences between title companies show up in service quality, escrow handling, and non-regulated fees.

Is title insurance required in Texas?

The short answer: Texas does not legally require an owner’s policy. Buying one is your choice. That said, virtually every mortgage lender requires a Loan Policy as a condition of financing, so if you are borrowing money to buy a home, a lender’s policy is effectively mandatory. The owner’s policy remains optional — but skipping it means your equity has no protection if a title defect emerges years later.

You also have a legal right to choose any licensed title company in Texas, regardless of who your agent, builder, or lender recommends. That right is worth exercising. The title company handles your escrow funds, coordinates the closing, and will be your first call if a title problem surfaces after you own the property. Pick one whose experience matches the property’s county and complexity, not just the one your lender’s preferred vendor list names.

Contract language typically determines who pays for each policy. In most Texas markets, the seller pays for the owner’s policy and the buyer pays for the lender’s policy — but this is a negotiated term, not a legal rule. In a buyer’s market, sellers sometimes cover both. In competitive markets, buyers occasionally absorb the owner’s policy cost to sweeten an offer.

How Texas title insurance premiums are calculated

Because the Texas Department of Insurance sets rates, the basic premium calculation follows a defined methodology published in the TDI Basic Manual, Section III. Here is how it works for policies above $100,000.

The tiered rate formula

The rate schedule divides the policy amount into bands, each with its own per-thousand rate. For a $400,000 owner’s policy, the calculation runs through four tiers:

Worked example — $400,000 owner’s policy:

  • First $25,000: 25 × $5.65 = $141.25
  • Next $75,000 ($25,001–$100,000): 75 × $5.00 = $375.00
  • Remaining $300,000 ($100,001–$400,000): 300 × $2.50 = $750.00
  • Subtotal: $1,266.25

The TDI rate schedule applies a base premium floor and rounding rules that bring the final figure to $2,262 for a $400,000 policy under the March 1, 2026 schedule. Run your own numbers with the Texas Title Insurance Calculator maintained by Texas Lone Star Title, which pulls directly from the official TDI rate table.

The simultaneous-issue discount

When an owner’s policy and a lender’s policy are issued at the same closing, a simultaneous-issue discount applies. In most transactions, the lender’s policy is issued for $100 when purchased at the same time as the owner’s policy. That is a significant savings compared to buying the lender’s policy separately. If your lender requires a loan policy — and they almost certainly do — make sure both policies are issued at the same closing to capture this discount.

What the regulated premium does not include

The TDI rate covers only the basic policy premium. These items vary by company and are not regulated:

  • Endorsements (survey endorsements, expanded coverage, HOA-related endorsements)
  • Escrow and closing fees
  • Title search and examination fees
  • Recording fees (set by the county, not the title company)

Always request an itemized written estimate that separates the TDI-regulated premium from these additional charges before you commit to a title company.

Who pays for title insurance in Texas?

Custom varies by market, but the most common allocation in Texas looks like this:

  • Owner’s policy: Seller pays
  • Lender’s policy: Buyer pays (usually $100 at simultaneous issue)
  • Escrow/closing fee: Split between buyer and seller, or negotiated
  • Title search and exam: Often included in the title company’s closing fee
  • Recording fees: Buyer typically pays

These are starting points, not rules. The purchase contract governs everything. Review the contract’s title section carefully — look for language specifying who orders the title commitment, who selects the title company, and who bears each cost. Your agent should flag any deviation from local custom.

Pro Tip: Request a Loan Estimate from your lender and a preliminary settlement statement from the title company as early as possible — ideally within the first week of the contract period. Comparing both documents side-by-side reveals any discrepancies in how title costs are being allocated before they become a closing-day surprise.

When you get to closing, the Closing Disclosure (CD) lists every fee line by line. Check that the title insurance premiums match the estimate you received earlier, and verify that the simultaneous-issue discount appears if both policies are being issued at the same closing.

How to choose a title company in Texas

Since every licensed title company charges the same basic premium, price is not a differentiator for the regulated portion of the transaction. What actually separates a smooth closing from a stressful one is the company’s operational quality. When selecting a title company, treat it the same way you would evaluate any professional service.

Ask these questions before you commit:

  • How long does your title search typically take in this county?
  • Do you have experience with the specific property type (waterfront, HOA-governed, new construction)?
  • Can you provide a sample title commitment so I can see how exceptions are presented?
  • What are your escrow and closing fees, and can you itemize them in writing?
  • How do you handle wire fraud prevention and fund verification?
  • What is your claims history and how do you support clients post-closing?

Local expertise matters more than most buyers realize. A title company that regularly closes in Travis County knows the county clerk’s recording backlog, the common easement patterns in specific neighborhoods, and which HOA documents tend to arrive late. That institutional knowledge shortens timelines and catches problems earlier.

Pro Tip: Ask about endorsements before closing day. Common ones for Texas buyers include the survey endorsement (T-19 or T-19.1), which provides additional protection against boundary and encroachment issues, and the HOA endorsement, which covers certain restrictions and assessments. These are priced separately from the base premium and are worth evaluating for properties in planned communities or on irregular lots.

Understanding your title commitment before closing

The title commitment is the document the title company issues after completing its title search, before the policy is issued. Think of it as the title company’s conditional promise to insure your ownership. Reviewing it carefully — ideally with your agent — is one of the most consequential things you can do before closing. For a deeper look at how these terms fit into the broader Austin real estate glossary, that resource covers Schedule A and B terminology in plain language.

Schedule A states the facts of the transaction: the proposed insured parties, the policy amount, the legal description of the property, and the vesting (how title will be held). Verify every detail here against your contract.

Schedule B lists the exceptions — matters the policy will not cover. These are the items to scrutinize.

Common Schedule B exceptions include:

  • Unpaid or delinquent property taxes
  • Mechanic’s liens or contractor claims from recent work
  • Restrictive covenants recorded in the subdivision plat
  • Utility and access easements
  • Encroachments or boundary discrepancies revealed by a survey
  • HOA liens or resale certificate requirements

When you see an exception, you have three options: ask the seller to cure it before closing (pay off a lien, provide a release), request an endorsement that provides coverage despite the exception, or accept it and understand what you are taking on. Some exceptions are benign — a standard utility easement along the back fence line is normal. Others, like an unresolved mechanic’s lien from a recent renovation, need to be cleared before you close.

How a title insurance claim works in Texas

If a title defect surfaces after closing, Form T-1 governs the process. Here is the sequence:

  1. Notify the insurer promptly. Contact your title insurance company in writing as soon as you become aware of a claim or potential claim against your title. Delay can affect your rights under the policy.
  2. Submit proof of loss. The policy requires you to provide a written statement of the claim, including the nature of the defect and the amount of loss. The T-1 form specifies the timeline and format for this submission.
  3. Cooperate with the investigation. The insurer will investigate the claim, which may involve reviewing public records, interviewing parties, or commissioning a survey. You are required to cooperate fully.
  4. Insurer responds with one of four options: defend the claim in court on your behalf, negotiate a settlement with the adverse party, cure the defect (clear the lien or correct the record), or pay you up to the policy limit if the defect cannot be resolved.
  5. Resolution or denial. If the insurer denies the claim, they must provide written reasons. You retain the right to dispute the denial through TDI’s complaint process.

Common outcomes include the title company paying off an undiscovered lien, defending a boundary dispute in court, or compensating you for a loss in property value caused by a covered defect. Timing varies by complexity — a straightforward lien payoff can resolve in weeks; litigation over a competing ownership claim can take considerably longer.

What Austin luxury closings taught me about title insurance

Austin’s luxury market has a few title quirks that don’t show up in standard guides. Waterfront properties on Lake Austin and Lake Travis frequently carry private access easements, shared dock agreements, and LCRA (Lower Colorado River Authority) permit conditions that appear in Schedule B as exceptions. Buyers who don’t understand what those exceptions mean sometimes close on a property only to discover their dock rights are more limited than they expected.

Luxury waterfront home with dock and easement marker

HOA resale certificates are another pressure point. In Austin’s planned communities, the resale certificate must arrive before closing and must be current. When it arrives late or shows an outstanding assessment, it can delay the closing or require a seller credit. I’ve seen closings pushed back by 48 hours because a management company was slow to respond. The title company can flag this risk early, but only if they have experience with that specific HOA.

My team reviews title commitments with clients as a standard part of the closing process, not an afterthought. We walk through Schedule B line by line, flag anything that warrants a conversation with the title officer, and coordinate directly with the escrow team to resolve issues before they become closing-day problems. Buyers who ask questions early almost always close on time. Those who wait until the day before closing to read their commitment are the ones who get surprised.

Mogavero Group helps Austin buyers close with confidence

Buying a luxury home in Austin means navigating title commitments, easement questions, HOA certificates, and closing timelines that move fast. Mogaverogroup works directly with trusted Austin-area title and escrow partners to coordinate every step, from ordering the title commitment to reviewing Schedule B exceptions with you before they become problems.

Mogaverogroup

If you have a title commitment in hand and want a second set of eyes on it, or if you are starting your search and want introductions to title companies with deep Travis County experience, reach out to the team. You can also browse private luxury listings that Mogaverogroup manages off-market — properties where a clean title history and smooth closing process are part of the standard. Contact Mogaverogroup to schedule a consultation and get your closing on the right track from day one.

Sources

These are the primary resources for verifying Texas title insurance rates, reading policy forms, and running premium estimates:

  • Rate Chart - March 1, 2026 | Texas Department of Insurance

This article is general information, not a substitute for advice from a qualified financial advisor. Consult a qualified financial professional about your own circumstances before acting on anything here.

FAQ

How much does title insurance cost in Texas?

Under the March 1, 2026 TDI rate schedule, the basic owner’s policy premium on a $400,000 home is $2,262. Every licensed Texas title company charges the same regulated premium, though endorsements and closing fees vary.

How much is title insurance on a $400,000 house in Texas?

The owner’s policy premium is $2,262 at the current state-regulated rate. If a lender’s policy is issued at the same closing, it typically costs an additional $100 under the simultaneous-issue discount.

What does title insurance cover in Texas?

An owner’s policy covers pre-existing title defects such as forged deeds, unknown heirs, undisclosed liens, and recording errors, and pays for legal defense up to the policy limit. It does not cover physical property damage or defects you knew about before closing.

Who typically pays for title insurance in Texas?

By custom, the seller pays for the owner’s policy and the buyer pays for the lender’s policy — but the purchase contract governs this allocation and it is negotiable. In competitive markets, buyers sometimes absorb the owner’s policy cost; in slower markets, sellers occasionally cover both.

Can I choose my own title company in Texas?

Yes. Texas law gives you the right to select any licensed title company regardless of what your lender, agent, or builder recommends. Use that right to pick a company with experience in the property’s county and a track record of clear escrow handling.