Title Insurance in Texas: What Buyers and Property Owners Should Know
What Is Title Insurance in Texas?
Buying real estate is a significant investment, but receiving a deed does not necessarily mean that problems involving the property’s title cannot arise. Unpaid liens, ownership disputes, errors in public records, and claims involving previous owners can create complications long after a real estate transaction takes place.
Title insurance is designed to protect against certain covered title defects and ownership issues. Understanding what title insurance does—and what it does not cover—can help Texas buyers and property owners make informed decisions before closing.
At Walter Law, PLLC, our real estate attorneys help buyers, sellers, investors, and property owners understand title issues and address legal problems involving Texas real estate.
What Is Title Insurance?
Title insurance is a type of insurance that protects against certain financial losses resulting from covered defects in the title to real property.
Unlike many other forms of insurance that protect against future events, title insurance generally protects against certain title problems that existed before the policy was issued but were discovered later.
Before issuing a title insurance policy, a title company typically researches public records and issues a title commitment identifying requirements, exceptions, and other matters affecting the property.
​
What Is the Difference Between a Title Commitment and Title Insurance?
A title commitment and a title insurance policy are related, but they are not the same thing.
A title commitment explains the conditions under which a title company is willing to issue a title insurance policy. It may identify ownership information, liens, easements, restrictions, and requirements that must be addressed before closing.
The title insurance policy is issued after closing and provides coverage according to the specific terms, conditions, and exclusions contained in the policy.
Understanding the title commitment before closing can help buyers identify potential concerns before the transaction is completed.
What Are the Different Types of Title Insurance?
There are generally two primary types of title insurance policies involved in Texas real estate transactions.
Owner’s Title Insurance
An owner’s title insurance policy protects the property owner against certain covered title defects and claims.
Depending on the terms of the policy, coverage may involve issues such as:
-
Unknown ownership claims
-
Certain recording errors
-
Undisclosed liens
-
Forgery involving prior documents
-
Claims involving missing heirs
-
Other covered defects affecting ownership
The specific coverage depends on the terms and exceptions contained in the policy.
Lender’s Title Insurance
A lender’s title insurance policy protects the mortgage lender’s financial interest in the property.
The lender’s policy generally does not provide the same protection to the property owner. Buyers should understand which policies are being issued as part of their transaction and whose interests those policies protect.
Why Is Title Insurance Important?
Real estate ownership can involve legal issues that are difficult to identify simply by inspecting the property.
For example, a buyer may later discover:
-
An undisclosed lien
-
A claim by a previous owner
-
An error in a prior deed
-
An unknown heir claiming an ownership interest
-
A problem involving the property’s legal description
-
A previously recorded document affecting ownership
Some title problems can become expensive and time-consuming disputes. Title insurance may provide protection against certain covered claims, depending on the policy.
What Does Title Insurance Not Cover?
Title insurance does not protect property owners against every possible real estate problem.
Policies contain exclusions and exceptions that limit coverage. Depending on the circumstances and policy terms, certain matters involving easements, restrictive covenants, boundary disputes, zoning issues, or problems created after closing may not be covered.
This is one reason buyers should carefully review their title commitment and understand the exceptions listed before closing.
​
Common Title Problems in Texas Real Estate Transactions
Title problems can arise for many reasons.
Common issues include:
-
Unreleased liens
-
Judgment liens
-
Tax liens
-
Mechanic’s liens
-
Errors in previous deeds
-
Missing signatures
-
Ownership disputes
-
Unknown heirs
-
Probate complications
-
Easements
-
Encroachments
-
Boundary disputes
-
Incorrect legal descriptions
Some issues can be resolved relatively quickly, while others may require negotiations, corrective documents, probate proceedings, or litigation.
What Happens If Someone Makes a Claim Against Your Property?
If someone asserts a claim involving your ownership of the property, the first step is typically to review the title documents and determine whether the issue may be covered by the title insurance policy.
Depending on the circumstances, the property owner may need to:
-
Notify the title insurance company
-
Submit a claim
-
Review the title policy and exceptions
-
Gather deeds and other ownership documents
-
Respond to demands or legal claims
-
Consult with a real estate attorney
The appropriate response depends on the nature of the claim and the terms of the title insurance policy.
​
What Should You Know Before Calling a Real Estate Attorney?
Before contacting a real estate attorney about a title problem, gathering the relevant documents can help the attorney better understand the situation.
Helpful documents and information may include:
-
The title commitment
-
The title insurance policy
-
The purchase contract
-
The deed
-
The property survey
-
Closing documents
-
Letters or notices involving the title dispute
-
Information about liens or ownership claims
-
Relevant communications with the title company or other parties
You should also be prepared to explain when you purchased the property, when you first discovered the problem, and whether any deadlines or pending legal proceedings may be involved.
The more information available at the beginning of the consultation, the easier it may be to identify the legal issues and discuss potential options.
Frequently Asked Questions About Title Insurance in Texas
Is title insurance required in Texas?
Texas law does not generally require property owners to purchase an owner’s title insurance policy. However, mortgage lenders may require a lender’s title insurance policy as a condition of financing.
Is title insurance the same as homeowners insurance?
No. Homeowners insurance generally protects against certain future events involving the property, while title insurance addresses certain covered defects affecting ownership or title.
How long does an owner’s title insurance policy last?
An owner’s title insurance policy generally remains in effect as long as the insured owner maintains an interest in the property, subject to the terms of the policy.
Can a title company fix every title problem?
No. Some title issues can be resolved through corrective documents or other actions, while more complicated disputes may require legal proceedings.
Do I need an attorney if I have title insurance?
It depends on the circumstances. Title companies and real estate attorneys serve different roles. If you are facing an ownership dispute, lien issue, title defect, or disagreement involving coverage, consulting with a real estate attorney may help you understand your legal rights and options.
Learn More About Texas Real Estate Law
Title insurance is only one part of protecting your interests when buying, selling, or owning property in Texas.
Explore our related Texas real estate law resources:
Speak With a Texas Real Estate Attorney
Title issues can affect your ownership rights, ability to sell property, and financial investment. Identifying and addressing these problems as early as possible may help prevent more complicated disputes.
Walter Law, PLLC assists buyers, sellers, investors, and property owners with title issues and other Texas real estate matters.
Contact Walter Law, PLLC to schedule a consultation with a Texas real estate attorney.