What is title insurance?
Why do I need title insurance?
How does title insurance work?
Do I have to purchase title insurance?
How much does title insurance cost?
How much does title insurance cover?
What happens if there are unresolved claims on a property at the time I go to buy it?
Why do I need title insurance if I refinance a mortgage?
What do I do if I have a claim?

What is title insurance?
A title is a document that serves as proof of ownership. An owner title insurance policy is a contract protecting a buyer of property from financial loss due to a defect in the title that existed at the time the policy was issued. Unlike other types of insurance, a title policy protects the buyer from events that occurred in the past.

There is also a mortgagee title policy, which is a contract protecting the lender from a financial loss due to a defect in the owner’s title. The mortgagee policy does not protect the owner from loss, but does repay the balance of an owner’s mortgage if a claim against the title or property voids the title.

Why do I need title insurance?
An owner title policy guarantees that a property is unencumbered by any legal attachments that might limit or jeopardize ownership. It protects the buyer from financial loss resulting from: prior liens; undisclosed heirs; forged documents; improperly drafted deeds; secret marriages and other misrepresentations of marital status; improperly recorded documents; documents executed by persons lacking legal capacity; fraud; and gaps in the chain of title. These are just a few of the potential risks a buyer faces when purchasing real estate. Without title insurance, a buyer has limited recourse should any of these situations arise.

Note that a deed does not give clear ownership, as it is not proof that the seller is actually the owner of the property. It also tells nothing about any rights, liens or claims that may be outstanding against the title.

How does title insurance work?
In preparing to issue a title policy the title company reviews all public records pertaining to the property and the parties, researches any liens filed against the property or the record property owner, and reviews relevant wills, divorce decrees, property agreements, tax records, entity formation documents, and trust agreements. If a problem arises after the policy has been issued, the buyer makes a claim with the title insurance company, which has a duty to pay for financial losses resulting from covered items such as those listed above and to defend the buyer against challenges to title.

Do I have to purchase title insurance?
Although not required, title insurance is a smart financial move that helps to protect a buyer’s investment. Furthermore, most lenders require a mortgagee title policy as a condition of making a loan.

How much does title insurance cost?
For a single, one-time-only fee, we provide a title policy that remains effective until the property is sold to a new owner—even if that doesn’t occur for decades. The policy amount is the sale price of the property on an owner’s policy and the principal amount of the loan on a mortgagee policy. The Texas Department of Insurance sets the rates for Texas title insurance policies. For a list of rates and how they’re determined, click here. In addition to the policy itself, there are other charges associated with buying a title policy, including escrow fees, recording fees and closing costs. Chicago Title’s price structure is among the lowest—giving you the most respected name in title insurance at highly competitive rates. For questions about rates, please contact us at 512.282.8900.

How much does title insurance cover?
A title policy covers actual losses up to the amount of the policy at the time a claim is made and any related legal expenses. It does not cover increases in property value unless an increased value endorsement is purchased.

What happens if there are unresolved claims on a property at the time I go to buy it?
Any such claims must be resolved prior to closing on the purchase of a property and issuance of the title insurance policy. Title insurance protects against defects or potential claims that predate the closing. Unlike most other types of insurance, title insurance does not cover defects that arise after the policy has been issued.

Why do I need title insurance if I refinance a mortgage?
From the lender’s standpoint, a refinanced loan is the same as any other mortgage. The lender needs a separate policy insuring the validity of your mortgage when it is made, as a current policy doesn’t protect against events that may have occurred from the time you purchased the property to when you refinanced. For example, there could be a mechanic’s lien against your home by a builder who wasn’t paid for home improvements. There will be a new charge for title insurance, along with other expenses, including recording fees, closing fees and endorsements.

What do I do if I have a claim?
Contact us at 512.282.8900 and we will follow up immediately.