We have found there to be some confusion about this topic, so we figured it might be a good time to share some info on our Melrose blog. Tennessee title insurance premiums and costs can vary depending on the county. This is related to whether or not a particular county is classified as all-inclusive or not.
In non-all-inclusive counties, a/k/a “risk rate counties”, the work associated with the “search” and “examination” components is performed (or controlled) by the title agent and as such, the title agent is normally entitled to retain the fees for performing those components.
In these non-all-inclusive counties the charge for “risk assumption” is the only component of the “premium” and is earned by the Insurer for the issuance of the policy. This latter charge for the “risk assumption” is generally referred to as the “risk rate.”
The majority (89 out of 95) of Tennessee counties fall into the category of “risk rate counties.” In those counties, the payment for the various components are paid directly to the entity whose responsibility it is to perform that component, i.e. the title agent charges his search and examination fees separately from the “risk assumption” or “risk rate” fee which is due to the Insurer.
These are called “risk rate” counties, because the “gross premium” in those counties is only designed to compensate the Insurer for its “risk assumption.” Title agents are compensated separately for the search and examination functions and in these counties, there is no regulation of what can be charged for those activities.
In the “all inclusive” counties (Knox, Davidson, Hamilton, and for most Insurers in Rutherford and Williamson counties) the “gross premium” is a single fee that includes all three components, i.e. “search,” “examination” and “risk assumption.” In this case, the consumer will be charged a “gross premium,” but he will not be charged separately for the “search” and “examination” functions the title agent performs.
The only exception to this ‘all inclusive” rate might be where the search required multiple chains of title, encountered complex title issues or involve other unusual scenarios set out in the Insurers rate filing, but this would be a minor exception to the rule.