Owner's title insurance on a zero down mortgage? (Howe: sale, lender)

[soontobetexan]

What's the point of paying thousands of dollars for a title insurance policy on a zero-down mortgage, when the lender's policy we're already paying for covers the entire purchase price?

Can the owner's policy be purchased later in time when there is sufficient equity to be concerned with? Not sure how it works in Texas. Is an owner's policy required as well as a lender's?

[AustinGuy]

AFAIK, you always have to buy title insurance in texas even if you pay with cash.

[verybadgnome]

And it's a big scam made legitimate by state law. Analysis from a study on Title Insurance:

"The title insurance industry pays about 4% of its collected premiums in claims, compared to a 75% payout for auto insurance.............Iowa is the only state that does not allow the sale of title insurance. Iowa has a state-run Title Guaranty Program that costs the home buyer just $385 for up to $500,000 of coverage"

[austinizer]

Here is an article about Title Insurance in Texas. The article states that the owner's policy is not required by law.

The article doesn't mention if a lender can require you to have an owner's policy. However, my understanding is (someone correct me if I'm wrong) that the lender's policy is only a small amount if purchased in combination with an owner's policy, otherwise it is more expensive (all this is regulated by the Texas Department of Insurance). I think for a lender only policy with a zero down mortgage, the premium may be comparable to the owner's policy, but you can check the details of the rules on the TDI website.