What is Title Insurance in Texas?

Title insurance in Texas is a form of insurance that protects buyers and lenders in Texas from financial liabilities that might arise due to a faulty title or hidden liens associated with the property. There are two types of Texas title insurance policies: Lender’s and Owner’s. For a more detailed overview of title insurance, watch our title insurance explained video we put together.

Lenders in Texas will generally require borrowers to purchase a Texas title insurance lender’s policy. This way lenders are safeguarded against issues arising out of defects in the property's title. A Texas Owner's title insurance policy, on the other hand, protects the buyer of the property from any defects in title or liens.

How much does Title Insurance Cost in Texas?

Cost of title insurance in Texas for a $100,000 property is around 0.83% of the total value of the home and just above 0.6%-0.7% for anything around $200,000 and more. 

For example, the cost of a Texas owner's title insurance policy is $832 for a $100,000 property, $1,359 for a $200,000 property, $2,413 for a $400,000 property.

To give you a scale on the distribution of costs, look at the use cases below.

  • For a purchase price of a $200,000 property in Texas with 20% down payment ($40,000), the cost of title insurance owner's policy and lender's policy are $1,359 and $100 respectively. 
  • For a purchase price of a $200,000 property in Texas bought with full cash, the cost of title insurance owner's policy is $1359. 
  • For a purchase price of a $500,000 property in Texas with 20% down payment ($100,000), the cost of title insurance owner's policy and lender's policy are $2,940 and $100 respectively. 
  • For a purchase price of a $200,000 property in Texas bought with full cash, the cost of title insurance owner's policy is $1359. 
  • For a purchase price of a $1,000,000 property in Texas with 20% down payment ($200,000), the cost of title insurance owner's policy and lender's policy are $5,575 and $100 respectively. 
  • For a purchase price of a $200,000 property in Texas bought with full cash, the cost of the title insurance owner's policy is $5,575. 

How to calculate title insurance rates in Texas?

There is a formula to calculate title insurance cost in Texas. It applies to all the counties in Texas.

It starts by creating a total of 7 slabs based on the property value. These are the rates as of Sep 1, 2019. Also note that these rates are set by the Texas Department of Insurance that change every year. 

Property Value Multiple  Dollar Value to be added
$100,001 - $1,000,000 $0.00527 $832
$1,000,001- $5,000,000 $0.00433 $5,575
$ 5,000,001 - $15,000,000 $0.00357 $22,895
$15,000,001 - $25,000,000 $0.00254 $58,595
$25,000,001 - $50,000,000 $0.00152 $83,995
$50,000,001 - $100,000,000 $0.00138 $121,995
Above $100,000,000 $0.00124 $190,995

 

For Any property falling in the first slab first deduct the base value of the slab. Here it is $100,000. So, for a $200,000 property, you get $100,000 after subtraction. 

The next step is to multiply this amount with the multiple against the respective slab. So here, we multiply $100,000 with $0.00527. That comes to $527. 

The final step is to add the value listed in the third column against the respective slab. Here we will add $832. Hence $527+$832 = $1,359

Hence for a $200k property you are going to pay around $1359 as title insurance rate. 

Who Pays for Title Insurance in Texas?

Usually the buyer for the loan policy that safeguards the lender while the seller pays for the owner’s policy.