There are two types of title insurance policies: an owner policy and a lender policy.
In South Florida, owner policies are purchased by the seller of real property and given to the buyer of that property. The insurance protects the buyer from damages caused by defects in the title to real property. The policy has a stated dollar coverage limit, provides a lawyer to defend against any claim or lawsuit challenging title, and reimburses the buyer for money damages.
All banks and large mortgage lenders require lenders insurance to protect the home (collateral) on which they have a mortgage. If the mortgage turns out to be defective and the lender cannot foreclose when the loan goes into default, the lender can seek payment from the insurer up to the amount of the loan (which is the amount of the coverage).
In this area of insurance, litigation often occurs when there is fraud, or when there are documents which contain clerical errors, or when public records are found which the insurance company failed to find before the property was sold.