Title insurance insures, defends, indemnifies, and protects the policyholder against claims or losses arising from a defect or claim against the title to real property. Title insurance is usually issued to the buyer of real property by the title company that conducted the title search.
In Tennessee, title insurance is a contractual arrangement that protects real estate buyers and lenders from financial loss due to defects in a property's title. The title insurance policy ensures that the policyholder has a clear title to the property, free from any legal claims such as liens, encumbrances, or defects in the title. It is typically issued after a thorough title search has been conducted by the title company to uncover any potential issues with the property's history. If a claim is made against the property's title, the title insurance company is responsible for defending the policyholder in court or compensating for the financial loss up to the coverage limit. Title insurance is regulated in Tennessee by the Tennessee Department of Commerce and Insurance, which sets standards and regulations for title insurance companies operating within the state. It is important to note that title insurance is different from other types of insurance because it covers events that occurred before the policy was issued, rather than after.