What is title insurance and do I need it?

Title insurance protects against problems with a property's legal ownership history — specifically, defects that existed before you bought it but weren't discovered until after. Unlike most insurance (which covers future events), title insurance covers past events.

What title insurance covers

• Unknown liens from previous owners (unpaid contractor bills, IRS tax liens, HOA dues)
• Errors in public records — mistakes in deeds, surveys, or legal descriptions
• Forged documents or fraud in the property's history
• Unknown heirs with a claim to the property
• Easements or encroachments that weren't disclosed

Two types of title policies

• Lender's policy: Required by nearly all mortgage lenders. Protects the lender's interest — not yours. You pay for it as part of closing costs.
• Owner's policy: Protects you as the buyer. In Texas, it's customary for the seller to pay the owner's title policy premium.

Is it worth it?

Yes. Title issues are rare, but when they surface, they can be expensive and legally complex to resolve. An owner's policy is a one-time premium (no annual renewal) that covers you for as long as you own the property — and often costs less than $1,500 on a typical Central Texas transaction. In Texas, since the seller pays the owner's policy, most buyers are getting this protection at no direct cost to them.