What are exclusions in title insurance related to?

Exclusions in title insurance specifically refer to known defects that are not covered by the policy. Title insurance is designed to protect against losses arising from defects in title to real property, but it does not cover everything. Known defects, which may include issues like liens, defects in the chain of title, or other problems that are already acknowledged, are explicitly excluded from coverage because the policyholder is already aware of them at the time of the policy issuance.

Items such as encroachments, unrecorded easements, and undelivered instruments have different implications in the context of title insurance. Encroachments may affect property boundaries and usage but are generally not classified under exclusions. Unrecorded easements can pose risks related to property use, but if known, they may also fall under acknowledged defects rather than exclusions. Undelivered instruments pertain to legal documents that have not been properly executed or delivered and typically wouldn’t be categorized the same way as known defects. Thus, focusing on the nature of exclusions, it is clear that known defects align most closely with what is explicitly excluded from coverage in a title insurance policy.