What is title insurance?
What it protects, what it costs, and why most closings include it.
When you buy a property, you want to know the seller really owns it and that nothing from the past can take it away from you. Title insurance protects you against problems in that history that nobody found before closing.
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Paid once
One premium at closing. No renewals.
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No expiration
An owner’s policy lasts as long as you or your heirs keep an interest.
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Looks backward
It covers problems that began before you bought.
What “title” means
Title is your legal right to own and use a property. Every deed, mortgage, lien, and court judgment that has touched the property is recorded in the county’s public records. Together, that recorded history of ownership is called the chain of title.
Before closing, a title company searches those records to confirm who owns the property and what claims are attached to it.
How title gets checked before closing
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Title search
A review of deeds, mortgages, liens, judgments, tax records, and probate filings for the property.
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Title commitment
The insurer’s offer to issue a policy. It lists requirements to meet before closing and exceptions the policy won’t cover.
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Curative work
Steps to clear problems before closing, such as paying off a mortgage, releasing a lien, or correcting an error in an earlier deed.
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Closing and policy
The deed is recorded, and the policy is issued based on the commitment.
What title insurance covers
A policy covers title problems that existed before you bought but weren’t found or disclosed. Try a few situations:
Is this covered? Pick a situation
Generally covered
Generally covered. A forgery in an earlier sale is a title problem that existed before you bought.
Your own policy spells out exactly what it covers and excludes.
Your policy spells out exactly what it covers and what it excludes. Read the exceptions in your title commitment before closing so you know what the policy won’t cover.
The two kinds of policy
- Lender’s policy. Protects the lender, up to the loan amount. Most lenders require one.
- Owner’s policy. Protects you, the buyer, for your own stake in the property. It’s optional.
Buying both together usually costs less than buying them separately. Read more in owner’s vs. lender’s title insurance.
How premiums are set in Tennessee
Title insurers must file their rates with the Tennessee Department of Commerce & Insurance, and agents charge the filed rates. Premiums depend on the sale price or loan amount and can differ by county. To get an estimate, see the title rate calculator.
Endorsements
An endorsement is an add-on to a policy that changes its coverage, usually to expand it. If you’re curious whether an endorsement applies to your property, ask when you open your file.
Next step
If you’re under contract, order title to open your file, or contact us with questions.
This is general information, not legal advice. Talk to your attorney.
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