Texas Title Policy Premium Calculator
Understanding Texas Title Insurance
Title insurance is a form of indemnity insurance that protects lenders and/or property owners from financial loss sustained from defects in a title to a property. In Texas, unlike many other states, title insurance rates are "promulgated" by the Texas Department of Insurance (TDI). This means that all title companies in Texas must charge the same basic premium rates for title insurance policies, ensuring a level playing field and preventing price gouging.
Why is Title Insurance Needed?
When you purchase a property, you receive a title, which is essentially a document proving your ownership. However, there can be hidden defects in a title that even the most thorough search might not uncover. These defects can include:
- Errors in public records
- Forged documents
- Undisclosed heirs
- Liens or encumbrances (e.g., unpaid taxes, contractor liens)
- Boundary disputes
- Improperly executed documents
Title insurance protects you from financial losses and legal expenses that could arise from such defects, providing peace of mind for both the buyer and the lender.
Types of Title Policies
There are two primary types of title insurance policies:
- Owner's Policy: This policy protects the property owner (buyer) from title defects. It is typically purchased by the seller in Texas, but this can be negotiated. The coverage amount is usually equal to the purchase price of the home.
- Loan Policy (Lender's Policy): This policy protects the lender's interest in the property. It ensures that the lender's lien is valid and enforceable. Lenders almost always require a loan policy when a mortgage is involved. The coverage amount is typically equal to the loan amount.
When both an Owner's Policy and a Loan Policy are issued in the same transaction (concurrently), the Loan Policy often qualifies for a significantly reduced premium, as the title search work largely overlaps.
How Texas Title Premiums Are Calculated
The premium for a Texas title insurance policy is primarily based on the property's value (for an Owner's Policy) or the loan amount (for a Loan Policy). The TDI sets a tiered rate schedule, meaning the cost per $1,000 of coverage decreases as the property value or loan amount increases. Our calculator uses the standard promulgated rates to provide an estimate.
It's important to note that while the basic premium is set by the state, there might be additional costs such as endorsement fees (for specific coverages requested by the lender), escrow fees, and other closing costs that are not included in this calculator's premium estimate. This calculator focuses solely on the base title insurance premium.
For refinances, Texas offers a "reissue rate" discount if a previous title policy was issued on the same property within a certain timeframe (typically 7 years). This calculator does not currently account for refinance discounts, but it's a factor to consider in a refinance transaction.
Disclaimer
This calculator provides an estimate based on the current Texas Department of Insurance promulgated rates for basic title insurance premiums. It does not include potential additional costs such as endorsements, escrow fees, or other closing costs. Actual costs may vary slightly due to rounding or specific transaction details. Always consult with a licensed Texas title company for an exact quote.
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function calculateTexasTitlePolicy() {
var propertyValueInput = document.getElementById("propertyValue");
var policyType = document.getElementById("policyType").value;
var resultDiv = document.getElementById("result");
var propertyValue = parseFloat(propertyValueInput.value);
if (isNaN(propertyValue) || propertyValue <= 0) {
resultDiv.innerHTML = "Please enter a valid property value greater than zero.";
return;
}
var ownerPremium = 0;
var loanPremium = 0;
var totalPremium = 0;
// Function to calculate premium based on TDI promulgated tiered rates
function calculateBasePremium(value) {
var premium = 0;
if (value 0) {
premium += 100.00; // Flat fee for the first $10,000
}
// Tier 2: Next $90,000 (from $10,001 to $100,000)
if (value > 10000) {
var amountInTier = Math.min(value, 100000) – 10000;
premium += (amountInTier / 100) * 0.85; // $0.85 per $100
}
// Tier 3: Next $900,000 (from $100,001 to $1,000,000)
if (value > 100000) {
var amountInTier = Math.min(value, 1000000) – 100000;
premium += (amountInTier / 100) * 0.58; // $0.58 per $100
}
// Tier 4: Next $4,000,000 (from $1,000,001 to $5,000,000)
if (value > 1000000) {
var amountInTier = Math.min(value, 5000000) – 1000000;
premium += (amountInTier / 100) * 0.50; // $0.50 per $100
}
// Tier 5: Next $5,000,000 (from $5,000,001 to $10,000,000)
if (value > 5000000) {
var amountInTier = Math.min(value, 10000000) – 5000000;
premium += (amountInTier / 100) * 0.45; // $0.45 per $100
}
// Tier 6: Over $10,000,000
if (value > 10000000) {
var amountInTier = value – 10000000;
premium += (amountInTier / 100) * 0.40; // $0.40 per $100
}
return premium;
}
if (policyType === "owner") {
ownerPremium = calculateBasePremium(propertyValue);
totalPremium = ownerPremium;
resultDiv.innerHTML =
"
Estimated Owner's Policy Premium: $" + ownerPremium.toFixed(2) + "" +
"
Total Estimated Title Premium: $" + totalPremium.toFixed(2) + "";
} else if (policyType === "loan_standalone") {
loanPremium = calculateBasePremium(propertyValue);
totalPremium = loanPremium;
resultDiv.innerHTML =
"
Estimated Loan Policy Premium (Standalone): $" + loanPremium.toFixed(2) + "" +
"
Total Estimated Title Premium: $" + totalPremium.toFixed(2) + "";
} else if (policyType === "owner_and_loan") {
ownerPremium = calculateBasePremium(propertyValue);
// For concurrent loan policy, a common practice is a fixed small fee, e.g., $100-$200.
// Using $100 for this calculator as a common example.
loanPremium = 100.00; // Concurrent Loan Policy fee
totalPremium = ownerPremium + loanPremium;
resultDiv.innerHTML =
"
Estimated Owner's Policy Premium: $" + ownerPremium.toFixed(2) + "" +
"
Estimated Loan Policy Premium (Concurrent): $" + loanPremium.toFixed(2) + "" +
"
Total Estimated Title Premium: $" + totalPremium.toFixed(2) + "";
}
}