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July 10th, 2019

Texas Title Insurance Basic Premium Rates Change Sept. 1

Title insurance for your Texas property is one of the most important investments to make in acquiring a new home. You have the option to work with any title agent you want. While your real estate agent or lender may make recommendations, you can research and choose your own agent.

Cost Of Title Insurance

Title insurance rates are based on the property’s sale value. The Texas Department of Insurance (TDI) sets insurance premium rates, and all title agents charge the same premium for property of the same value. After several years of no change to the set rates, the Texas Commissioner of Insurance has set an order for rates to change beginning September 1, 2019.

The change comes after the Texas Land Title Association (TLTA) filed a petition to the Commissioner of Insurance about title insurance premium rates and rate rules. In November 2018, TLTA filed a petition in request of several changes, including:

  • A decrease of 4.9 percent to the basic premium rates.
  • Revisions to rate rules for the simultaneous issuance of policies, the refinance of credit, and the time to receive a reduced premium for an owner’s policy issued after a large construction project.
  • Offer transparency by streamlining the rate-making process.

The basic premium rate includes the cost of title examination, closing, and issuing the policy. The title policy premium is paid only once, at the closing of the sale. While the basic premium rates are the same across all agents, what does vary is added charges for tax certificates, escrow fees, recording fees, and delivery expenses. To ensure you understand how much you’ll pay for title insurance at closing, ask your potential agent for a list of charges and review the charges carefully.

Texas Title Insurance Changes

Beginning Sept. 1, 2019, title insurance basic premium rates will change. The minimum policy coverage amount will be for $25,000 – as opposed to the current minimum of $10,000 – and will cost $328, excluding other varying fees mentioned above. The current basic premium fee for $25,000 coverage is $345.

According to TDI, the changes scheduled for implementation Sept. 1 are outlined in the following exhibits:

  • Exhibit A: Basic Premium Rates
  • Exhibit B: (R-5) Simultaneous Issuance of Owner’s and Loan Policies
  • Exhibit C: (R-8) Loan Policy on a Loan to Take Up, Renew, Extend, or Satisfy an Existing Lien(s)
  • Exhibit D: (R-20) Owner’s Policy After Construction Period

TDI’s order and exhibits can be viewed here.

Is Title Insurance Worth The Cost?

Despite lower rates for the majority of title insurance holders, many property buyers question if title insurance is worth the cost. What many don’t consider is that title insurance protects you after the real estate purchase, so even if liens or other defects present themselves after you close on the property, an owner’s policy protects your investment. You’re protected against:

  • Unpaid property taxes.
  • Fraud or forgery of a previous deed.
  • A spouse or unknown heir who makes a claim against the property.

An extensive title search will be performed to discover any foreseeable issues, but the coverage continues to protect you against any litigation or undocumented liens post purchase. Your title insurance agent will check for problems with your title by looking at public records, including deeds, mortgages, wills, divorce decrees, court judgments, tax records, liens, encumbrances, and maps.

If you have questions about the value of title insurance or how the new rates will affect your home purchase, contact the Patten Title Company. Our experienced agents will be happy to explain the process and what you can expect to pay based on the property value.