Title Insurance
Insurance that protects against title defects existing before the policy date, with separate owner and lender policies.
Title insurance protects against losses from defects in title that existed before the policy was issued, such as undisclosed liens, recording errors, or forged documents. An owner's policy protects the buyer up to the purchase price. A lender's policy protects the mortgage holder up to the loan amount.
A title search examines the public record, but some defects do not appear there. Title insurance covers those hidden risks. In Texas, title insurance premiums are set by the Texas Department of Insurance, and which party pays for the owner's policy is negotiated in the contract.
On the exam
Exam trap
Tested in
Ownership & Title (8% of the exam)
From definition to recall
See this term inside a real exam question.
Pass Texas gives you Texas-specific practice, diagnostics across the 14 exam areas, Trap Library, Math Coach, offline access, and one $59.99 purchase. No subscription. No copied exam questions.
Try 5 free questionsRelated terms
This definition is Texas real estate exam-prep education, not legal, tax, or professional advice. Verify current rules against the official source before relying on them for a real transaction. Back to the full glossary.