What is a Title Committment?
Title insurance provides protection against title defects that were unknown to you at the time you purchased the policy.
Before writing a policy, a title company will check for defects in your title by examining public records, including deed, mortgages, wills, divorces, court judgements, tax records, liens, and encumbrances. The company will then defend in court any claims to the property that are covered by your policy, subject to certain limitations. If the company loses, it will pay you for covered losses up the the amount of your policy.
In Texas, the two most common types of title policies are "mortgagee policies," which protect lenders, and "owner policies," which protect buyers.
Most lending institutions won't loan you money to buy a house or other property unless you purchase a mortagee policty. This policy will repay the balance of the mortgage if a claim against your property voids your title. Mortgagee policies remain in effect until the loan is repaid. Most lenders will require you to buy a new motgagee title policy if you refinance your home.
Owner policies insure property owners against the specific kinds of claims listed in the policy. Any owner policy remains in effect as long as you or your heirs own the property or are liable for any title warranties made when you sell the property. You should keep your owner policy, even if you transfer your title or sell the property.
In Texas our title policy forms are standarized. This mean the policy languae is the same, regardless of the company. Pay special attention to "Schedule B" of the policy which explains any limitations, exclusions, exceptions and special conditions. You many want to discuss these exceptions with an attorney before you close on a real estate deal.
The premium for a title policy is paid only once, at the closing of the sale. The buyer and seller may negotiate who pays the premium.
Title insurance premium rates are set by the Texas Department of Insurance and are based on the property's sale value using a sliding scale.