Texas Title Insurance: What It Covers, What It Costs, and How to Read the Commitment

This article provides general educational information about Texas title insurance and the title commitment process. It is not legal advice, and it is not a substitute for reading the actual commitment and policy in your transaction. Consult your licensed real estate agent, your title company, or a licensed Texas attorney for guidance specific to your purchase.

Title insurance is the one-time premium that protects a Texas home buyer, and the buyer's lender, against defects in the property's history that existed before the purchase: an old mortgage that was never released from the county records, a lien from a contractor who was never paid, a forged deed somewhere in the chain of title, a claim from an undisclosed heir, or a recorded easement that changes what you can do with the land. In Texas the premium is paid once at closing, the rates are set by the Texas Department of Insurance rather than by market competition, and by local custom the seller pays for the buyer's owner's policy while the buyer pays for the lender's policy [1][3]. This guide explains what the two policies cover, what the title commitment's four schedules mean, and the title issues Hill Country buyers should check before they sign.

A note on sourcing before the details. Texas title insurance is heavily regulated, and the rules below come from the Texas Department of Insurance, the Texas Title Insurance Basic Manual, and the title industry sources cited at the end of this article, all checked in October 2026. Rates, forms, and schedules change, so the commitment and policy in front of you are the authority for your specific transaction [3][4].

What title insurance covers, and what it does not

Title insurance is a form of indemnity insurance: it compensates the insured for financial loss caused by a title defect and defends the insured against lawsuits attacking the title [1]. Because the policy is issued after the title company searches the public records, it covers problems that existed before the purchase date, not problems that arise after you own the home [1][2].

The covered list is specific. Title insurance protects against unpaid property taxes and liens, fraud or forgery in prior deeds, mechanic's liens from contractors who were never paid, claims from undisclosed heirs or prior owners, clerical errors in the public records, improperly recorded documents or releases, and unknown easements that burden the property [1][2].

What it does not cover matters just as much. A title policy is not homeowners insurance: it does not pay for fire, flood, wind, theft, or structural damage, and it does not cover defects that arise after closing, such as a lien placed on the property after you take title [1][2]. It is a policy about the ownership history, not the physical condition of the house. The condition side of the transaction is handled by the inspection and the seller's disclosure notice, which Texas law requires most sellers to complete before the contract is signed.

The two policies: owner's and lender's

A Texas closing typically involves two separate title policies, and they protect different parties for different amounts [1][2].

The owner's policy protects the buyer. It is issued for the full purchase price, and it stays in force for as long as you or your heirs own the property. The coverage amount does not decline as you pay down the mortgage, because the policy is about the value of the property you bought, not the balance of your loan [1][2].

The lender's policy protects the mortgage lender. It is issued for the loan amount, and lenders require it as a condition of financing. Its coverage declines as the loan is paid down, and it drops away when the loan is paid off or refinanced [1][2].

For a financed purchase, both policies are typically issued at the same closing, and both are paid as one-time premiums. That is a key difference from homeowners insurance: title insurance is not an annual bill. You pay once, at closing, and the owner's policy covers you for as long as you hold the property [1][2].

Who pays for title insurance in Texas?

Texas follows a distinctive local custom: the seller pays for the buyer's owner's title policy, and the buyer pays for the lender's title policy [1]. This is a convention of the market and the standard Texas contract, not a statewide legal mandate, and the split is negotiable. The site's closing costs guide shows how the owner's policy lands on the seller's side of the settlement statement and the lender's policy on the buyer's side.

The owner's policy is optional in Texas, and a cash buyer can decline it. Most buyers do not, because the owner's policy is the only protection that survives closing: once the deed is recorded and the seller's proceeds are distributed, a title defect that surfaces later is usually not something the buyer can unwind, and the owner's policy is what pays the resulting loss [1][2].

Texas rates are set by the state, not the market

Texas is one of the states where title insurance rates are regulated rather than competitive. The Texas Department of Insurance sets the premium rates in the Texas Title Insurance Basic Manual, and every licensed title company and agent must charge the same promulgated rate for a given coverage amount [3]. Title companies compete on service, speed, and settlement fees, not on the price of the policy itself [3][4].

The rates are reviewed periodically by the commissioner. In the 2025 rate review, TDI ordered a reduction in basic premium rates effective March 1, 2026, so the rate schedule in effect for a 2026 Hill Country closing reflects that adjustment [4]. As a planning figure, an owner's policy on a typical Boerne or Fair Oaks Ranch purchase runs roughly $1,500 to $3,500 and a lender's policy roughly $1,000 to $1,500, depending on the purchase price and the coverage amount [4]. The site's closing costs guide carries the same ranges in table form for buyers and sellers planning their budgets.

The title commitment: the document to read before closing

Before the policies are issued, the title company produces a title commitment. The commitment is the title company's written promise that it will issue the policy, and it sets out the terms, the exceptions, and the requirements that must be satisfied before the company will close [5][6]. Under the standard Texas residential contract, the title company generally has 20 days from receipt of the executed contract to deliver the commitment, with an automatic 15-day extension, and the commitment typically remains effective for about 90 days [5][7].

The commitment is organized into four schedules, and each one answers a different question [5][6]:

What the title company is actually searching

The title search traces the chain of ownership through the public records of the county where the property sits. For a Hill Country purchase that means the county clerk's records in Kendall, Bexar, Comal, or Bandera County, depending on where the property is located: deeds and deeds of trust, liens and judgments, tax records, probate records, easements, and recorded restrictions [5][6]. The search is what lets the title company identify the exceptions in Schedule B and the requirements in Schedule C before anyone signs [5][6].

The search also explains why the commitment takes time. The county records are the raw material, and the title company has to work through every conveyance in the chain, every recorded encumbrance, and every pending matter that could attach to the property [6][7]. That is why the standard contract builds in a delivery window for the commitment rather than expecting it at the same time as the contract [5][7].

Hill Country title issues to watch for

Every market has title issues it sees more often than others, and the Hill Country version clusters around minerals, easements, liens, and boundaries [8][9].

• •Mineral rights reservations. Under Texas law the mineral estate can be severed from the surface, and an earlier deed may have reserved all or part of the minerals to a prior owner decades ago. Much of the Hill Country's acreage sells with little or no mineral ownership, and title policies commonly exclude or carve out minerals [9][10][11]. Buyers of acreage should confirm what is actually conveying and whether any active oil, gas, or mineral lease exists on the property [9][11].
• •Access and utility easements. Access easements are the most common issue on Hill Country tracts: landlocked parcels, unrecorded ranch roads that were never deeded, and recorded access easements to neighbors. Utility easements and pipeline easements are also routine, and several pipelines cross the region [8][14]. Recorded easements will appear in Schedule B; unrecorded ranch-road access will not, which is one reason a survey matters [8][14].
• •Unreleased liens and old clouds. A deed of trust that was paid off but never released from the county records is a common Schedule C item, as are property tax liens, judgments, and mechanic's liens [8]. Texas property taxes attach to the property automatically, and unpaid balances must be cleared before the transfer can close [8].
• •Boundary and survey issues. Hill Country tracts often use metes-and-bounds descriptions, so boundary conflicts, encroachments, and acreage discrepancies are frequent [8][13]. The standard owner's policy carries a survey exception that excludes coverage for boundary problems unless a current survey is provided and the exception is removed [8][12]. The site's survey fraud guide covers how to verify a survey before you rely on it.

How to read Schedule B like a Hill Country buyer

Schedule B is where the title company tells you what it will not cover, and it deserves the same attention as the inspection report. Every exception listed there is a risk the policy will not pay for, so the practical question for each line is whether you can live with it [5][6][8].

Two exceptions deserve special attention on Hill Country property. The first is the standard survey exception, which excludes coverage for boundary discrepancies, conflicts, and shortages unless a current survey is on file and the exception is removed [8][12]. The second is the mineral exception, which excludes the mineral estate from coverage and is common on acreage [9][10]. Neither is unusual, and neither is automatically a reason to walk away, but both should be understood before the option period ends, not discovered at the table [8][9].

The option period is the time to do this reading. The site's option period guide explains the timing that makes title review, the survey, and the inspection all possible before the contract becomes binding.

Frequently asked questions

Is the owner's title policy required in Texas?

No. The owner's policy is optional in Texas, and a cash buyer can decline it [1][2]. The lender's policy is required by the lender as a condition of financing, so financed buyers effectively pay for that policy regardless. Most buyers take the owner's policy anyway, because it is the protection that survives closing and covers the full purchase price [1][2].

What is the difference between a title commitment and a title policy?

The commitment is the title company's written promise to issue the policy, delivered before closing and organized into the four schedules [5][6]. The policy is the final contract of insurance issued at closing, after the requirements in Schedule C have been satisfied [5][6]. Read the commitment; the policy is what you keep.

Does title insurance cover boundary and survey problems?

Only if the survey exception is removed. The standard owner's policy excludes boundary discrepancies, conflicts, and shortages unless a current survey is provided and the exception is cleared [8][12]. A fresh boundary survey is the reliable way to remove that exception and to catch encroachments the records will not show [8][12][13].

What happens if the title company finds a problem?

Problems land in Schedule C as requirements: a judgment must be paid and released, a prior deed of trust must be satisfied and released, a past-due tax or HOA balance must be cleared [6][7][8]. The seller typically handles these before closing, and the closing cannot proceed until the requirements are satisfied [6][7][8].

Do sellers have to pay for the buyer's owner's policy?

No, not as a matter of law. The seller paying for the owner's policy is a Texas market custom and the assumption of the standard contract, and the split is negotiable [1]. Sellers should budget for it when they estimate net proceeds, and buyers should confirm the allocation in their contract [1].

The bottom line

Title insurance is the one-time premium that protects a Texas buyer and lender against defects in the property's history, and it is one of the few parts of a closing where the price is set by the state rather than the market [1][3][4]. The owner's policy protects the buyer for the full purchase price for as long as the property is owned; the lender's policy protects the lender as the loan is paid down [1][2]. The title commitment is the document to read before closing, and its four schedules tell you what the company found, what it will not cover, and what must be cleared before anyone signs [5][6]. For Hill Country buyers, the lines that deserve the most attention are minerals, easements, unreleased liens, and the survey exception, and the option period is the time to sort all of them out [8][9][12].

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Sources

1. Texas Department of Insurance, Title Insurance FAQ. What title insurance covers, the owner's and lender's policies, the one-time premium structure, and the customary division of costs. tdi.texas.gov
2. Texas Department of Insurance, "What is title insurance? Why do I need it for my new house?" Coverage scope, exclusions, and the difference between the two policies. tdi.texas.gov
3. Texas Department of Insurance, Title Insurance Basic Manual. The promulgated rates, rules, and forms that govern Texas title insurance. tdi.texas.gov
4. Texas Department of Insurance, Texas Title Insurance Premium Rates (effective March 1, 2026). The current rate schedule following the 2025 basic premium rate review. tdi.texas.gov
5. Texas National Title, "Understanding the Title Commitment." The four schedules, the delivery timeline, and how to read the commitment. texasnationaltitle.com
6. Texas Country Title, "What Is a Title Commitment in Texas? A Homebuyer's Guide." Schedule-by-schedule explanation for Central Texas homebuyers. texascountrytitle.com
7. Patten Title Company, "Demystifying Title Commitments for Texas Real Estate Agents." The commitment process and the delivery window under the standard contract. pattentitle.com
8. Texas Country Title, "How to Resolve Common Title Issues in Texas." Unreleased liens, easements, mineral reservations, and survey issues. texascountrytitle.com
9. Daughtrey Law, "Navigating Title Issues: Mineral Rights in Texas Real Estate." How severed mineral estates affect surface ownership and title coverage. daughtreylaw.com
10. Longhorn Realty, "Texas Hill Country Land with No Mineral Rights." Why much Hill Country land sells without mineral ownership. longhornrealty.com
11. Texas Railroad Commission, "Oil & Gas Exploration and Surface Ownership." The dominant mineral estate and surface access under Texas law. rrc.texas.gov
12. Texas Land Title Association, "Commitment to Closing: Texas Title Insurance Review & Doc Prep." Industry guidance on the survey exception and the path from commitment to policy. tlta.com
13. Texas Agriculture Law (Texas A&M AgriLife), "Texas Rural Land Purchasing Checklist." Boundary, access, and survey diligence for rural Texas tracts. agrilife.org
14. Warner, P.C., "Be Aware of Pipeline and Other Easements when Buying Land." Utility and pipeline easements across Texas land. wphk-law.com

The facts above were checked on October 6, 2026 against the Texas Department of Insurance, the Texas Title Insurance Basic Manual, and the title industry sources cited. Title insurance rates, forms, and rules change, so confirm anything time-sensitive with the current rate schedule and the commitment in your transaction.

Last verified: October 6, 2026