Title insurance rates in Texas are regulated by the Texas Department of Insurance (TDI). Title insurance premium rates in Texas are the same all through the State. Each title insurance agency in Texas is required annually to file a statistical report with the TDI in which all receipts and expenses of the agency for the prior year are disclosed. The TDI uses the statistical reports to conduct bi-annual rate hearings at which rates are reviewed to determine if they should be reduced or increased.
The TDI also regulates other aspects of title insurance in Texas such as forms and procedures, and requires title insurance agencies each year to have its escrow accounts audited by a CPA, to determine that the agency is complying with strict requirements concerning escrowed funds. The TDI also conducts spot audits of title agencies throughout the year in which all areas of the title insurance business of the agency are reviewed.
Why Title Insurance ?
Title insurance in Texas did not gain wide spread use until the mid to late 1960's. Prior to that, it was customary for a local "Abstract Company" to prepare an abstract of title, which was a booklet containing a copy or summarized description of each document that had ever been filed in the County Clerk's office of the county in which the property was located, pertaining to that particular piece of property. The purchaser of the property, or borrower, if a loan, was then required to employ an attorney to review the abstract and write a title opinion as to the status and sufficiency of the title. There were no regulations nor standard rules relating to the abstracts or opinions. If there were errors, the only remedy for the purchaser or lender was to make a negligence claim against the local abstract company or attorney who wrote the title opinion.
Title insurance now provides for a uniform method of insuring real property transactions, with the policy backed by a title insurance underwriter, and standardized claim procedures. A purchaser or lender knows that the same coverage for the same premium rate can be obtained in Goldthwaite, Texas, as in downtown Houston.
For more information see the Texas Land Title Association and Alamo Title Insurance links below.