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Texas Department of Insurance
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Loan Policy


The loan policy is issued to the mortgage lender. It protects the lender’s interest in the property until the borrower pays off the mortgage. For a complete list of covered risks, see the Covered Risks section of the Loan Policy.

Why do I need a loan policy?

Most lenders will require a loan policy as a condition of the mortgage. The policy will repay the balance of your mortgage if a claim against your property voids your title. A loan policy covers up to the amount of the principal on your loan.

How long does the loan policy last?

Loan policies remain in effect until you repay the loan. Most lenders will require you to buy a new loan policy if you refinance your home. When the new loan pays off the existing loan, the old loan policy expires.

Why does my owner’s policy cost more than the loan policy?

When an owner’s policy and a loan policy are purchased at the same time, the loan policy is issued at a discounted price of $100, plus any fees for endorsements required by the lender. If you decide not to purchase an owner’s policy, you will pay full price for the loan policy.

Do I get a discount if I refinance?

Yes, if you refinance within eight years. The premium discount varies, based on the number of years since your current loan began. If your current loan was within four years of your new loan, you get a 50% discount on the basic premium. If your current loan was between four and eight years before the new loan, you get a 25% discount. After eight years, you do not get a discount.

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Last updated: 12/4/2023