Are title insurers allowed to guarantee payment of the principal or interest of bonds and mortgages?

Title insurers are not permitted to guarantee payment of the principal or interest of bonds and mortgages. Title insurance primarily focuses on protecting against losses due to defects in the title to real property, such as issues arising from ownership disputes, liens, or encumbrances that may affect the property.

Offering guarantees related to the payment of bonds or mortgages would extend the role of title insurers beyond their primary function and introduce a different type of financial risk that is not within the scope of title insurance. This prohibition helps maintain the integrity and specialization of title insurance products, ensuring that they remain focused on issues pertaining to title defects rather than acting as financial guarantors for debt instruments, which fall under different regulatory frameworks and require distinct types of insurance or financial services.