Last updated on February 20th, 2026 at 06:34 am
Your complete guide to understanding title insurance costs, coverage, and who’s responsible for payment in Texas real estate transactions
⚡ Quick Answer
In Texas, the seller typically pays for the owner’s title insurance policy, while the buyer pays for the lender’s policy. However, this is negotiable and can vary based on local customs, market conditions, and the specific terms of your purchase agreement. The total cost ranges from 0.5% to 1% of the home’s purchase price.
What is Title Insurance?
Title insurance protects you from financial loss due to defects in a property’s title that weren’t discovered during the initial title search.
💡 Why Title Insurance Matters
Unlike other types of insurance that protect you from future events, title insurance protects you from past issues with the property’s ownership history. This includes problems like unpaid taxes, false documents, hidden liens, errors in public records, or claims from previous owners that could threaten your ownership rights.
Owner’s Title Policy
- Protects the buyer/homeowner
- Covers legal fees if ownership is challenged
- Lasts as long as you or your heirs own the property
- One-time premium paid at closing
- Protects against hidden title defects
- Typically paid by the seller in Texas
Lender’s Title Policy
- Protects the mortgage lender
- Required for all mortgage loans
- Coverage decreases as mortgage is paid down
- Ends when the loan is paid off
- Does NOT protect the homeowner
- Typically paid by the buyer in Texas
⚠️ Important Distinction
A lender’s policy only protects the bank or mortgage company—it does NOT protect you as the homeowner. This is why it’s crucial to have your own owner’s policy, even though it’s an additional cost. Without it, you could lose your home and still owe money on the mortgage if a title problem arises.
Who Pays For Title Insurance in Texas?
Payment responsibilities are typically split between buyer and seller, but these can be negotiated
Seller Typically Pays
- Owner’s Title Insurance Policy – Protects the new homeowner
- This is customary in most Texas transactions
- Shows good faith to the buyer
- Helps facilitate a smoother sale
- Cost is factored into seller’s net proceeds
Buyer Typically Pays
- Lender’s Title Insurance Policy – Required by mortgage company
- Usually 0.6-0.9% of home value
- Slightly less expensive than owner’s policy
- $100 discount when buying both policies together
- Required to close the loan
🤝 Negotiation is Key
While sellers customarily pay for the owner’s policy in Texas, this is NOT a legal requirement. Everything is negotiable in real estate. In a competitive market, buyers sometimes offer to cover both policies to make their offer more attractive. In a buyer’s market, sellers might agree to pay for both. Your real estate agent can advise on what’s typical in your local market.
Title Insurance Costs in Texas
Regulated rates ensure consistency across the state
| Home Value | Owner’s Policy (0.5-1%) | Lender’s Policy (0.6-0.9%) | Combined Total |
|---|---|---|---|
| $50,000 | $250 – $500 | $300 – $450 | $550 – $950 |
| $100,000 | $500 – $1,000 | $600 – $900 | $1,100 – $1,900 |
| $200,000 | $1,000 – $2,000 | $1,200 – $1,800 | $2,200 – $3,800 |
| $300,000 | $1,500 – $3,000 | $1,800 – $2,700 | $3,300 – $5,700 |
| $400,000 | $2,000 – $4,000 | $2,400 – $3,600 | $4,400 – $7,600 |
📊 Rate Regulation
The Texas Department of Insurance regulates title insurance rates, so prices are relatively consistent across companies. This means shopping around won’t necessarily save you money on the base premium, but you can compare service quality, closing speed, and additional fees.
Factors That Affect Price
🏠 Property Value
Higher home prices mean higher insurance premiums. The premium is calculated as a percentage of the purchase price.
📜 Endorsements
Additional coverage for specific risks (like survey issues or environmental concerns) increases the base premium.
🔍 Title Search Complexity
Properties with complicated ownership histories, multiple previous owners, or unresolved issues require more extensive research.
⏱️ Transaction Type
Refinances often cost less than purchases. Simultaneous owner’s and lender’s policies get a bundled discount.
🏛️ Property Type
Commercial properties or large parcels of land may have different rate structures than residential homes.
💲 Bundle Discount
Buyers save $100 when purchasing both owner’s and lender’s policies from the same company on the same day.
Legal Requirements & Texas Customs
Understanding the rules and common practices
⚖️ What Texas Law Says
Texas law does NOT mandate who must pay for title insurance. Unlike some states with strict requirements, Texas allows buyers and sellers to negotiate payment responsibilities. However, the Real Estate Settlement Procedures Act (RESPA) prohibits sellers from requiring buyers to use a specific title company.
Contract Negotiation
During the purchase agreement stage, buyer and seller (through their agents) negotiate who pays for which closing costs, including title insurance. This gets written into the contract.
Title Company Selection
The party paying for the owner’s policy typically chooses the title company. Buyer selects their lender’s title company. RESPA protects against coercion in these choices.
Title Search Conducted
The title company researches the property’s history, looking for liens, judgments, unpaid taxes, ownership disputes, or other issues that could affect the title.
Issues Resolved
If problems are found, they must be cleared before closing. This might involve paying off liens, correcting legal descriptions, or obtaining releases from creditors.
Closing & Payment
At closing, title insurance premiums are paid one time as part of closing costs. The policies are issued, and ownership officially transfers.
Why Title Insurance is Critical
Real-world scenarios where title insurance protects your investment
📄 Forged Documents
Previous owner’s signature was forged on the deed. Without title insurance, you could lose the house even though you paid for it in good faith.
💸 Unknown Liens
Previous owner didn’t payproperty taxes or contractor bills. Those liens attach to the property, not the person—meaning they become your problem without insurance.
👨⚖️ Ownership Disputes
An unknown heir appears claiming they should have inherited the property. Legal fees to defend your ownership could cost tens of thousands—covered by title insurance.
📏 Survey Errors
Property boundary is wrong, and your neighbor’s garage is actually on your land. Title insurance with survey coverage protects you from these disputes.
⚖️ Judgment Liens
Previous owner lost a lawsuit, and a judgment was recorded against the property. You could be responsible for paying it without title insurance.
🔐 Easement Issues
Undisclosed easement allows utility company or neighbors to use your property. Title insurance covers costs if this wasn’t properly disclosed.
🚨 Real Cost of Title Problems
Without title insurance, resolving these issues costs between $10,000 to $50,000+ in legal fees alone—not counting potential property loss. The one-time premium (0.5-1% of home value) is a small price to pay for this protection that lasts as long as you own the property.
Common Questions About Title Insurance in Texas
❓ Can I shop for title insurance?
Yes! Since rates are regulated by the state, base premiums are the same, but you can shop for better service, faster closing times, and lower ancillary fees. Some companies offer better technology, customer service, or convenience.
❓ Do I need owner’s title insurance if I pay cash?
While not legally required for cash purchases, it’s highly recommended. Title problems don’t care how you paid—they can still threaten your ownership. For 0.5-1% of the purchase price, you get lifetime protection.
❓ What if I’m refinancing?
You’ll need a new lender’s policy for the new loan (required by lender), but you don’t need a new owner’s policy—your original one still protects you. Refinance title insurance typically costs less than purchase title insurance.
❓ How long does title insurance last?
Owner’s policy: For as long as you or your heirs own the property—potentially forever. Lender’s policy: Until the mortgage is paid off or refinanced. Both are one-time premiums with no renewals.
❓ Can the buyer and seller split the cost?
Absolutely! Everything is negotiable. Some contracts specify 50/50 split, others might be 75/25, or any other arrangement both parties agree to. This is particularly common in competitive markets.
Bottom Line
📌 Key Takeaways
Standard Practice in Texas:
- Sellers typically pay for owner’s title insurance (0.5-1% of home value)
- Buyers typically pay for lender’s title insurance (0.6-0.9% of home value)
- Everything is negotiable—discuss with your real estate agent
- Texas Department of Insurance regulates rates
- One-time payment at closing protects you for life
The small upfront cost of title insurance protects you from potentially devastating financial losses down the road. Whether you’re the buyer or seller, understanding who pays and why helps you negotiate better and close with confidence.
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Bottom Line
Lastly, regarding title insurance in Texas, understanding who pays for it is essential. Homebuyers and sellers maneuver through negotiations concerning the costs. It is important to emphasize that title insurance safeguards against potential loss due to property title defects.
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