Are title insurers permitted to provide guarantees beyond the scope of indemnifying settlement funds?

Title insurers are not permitted to provide guarantees beyond the scope of indemnifying settlement funds. Their primary role is to issue insurance policies that protect buyers and lenders from losses arising from defects in title, which includes issues such as liens, encumbrances, or other claims against the property that were not known at the time of the transaction. The focus is on offering indemnity for these potential losses rather than providing additional guarantees or assurances regarding settlement funds or other aspects of the real estate transaction.

By limiting their scope to indemnification related to title defects, title insurers maintain regulatory compliance and focus on their core functions without overstepping into areas that might expose them to additional risks or liabilities. This ensures that they can effectively manage risk and provide the necessary protections that their policies are designed for, without becoming involved in other forms of financial guarantees that are outside their expertise.