American Land Title Association (ALTA) Practice Exam

Standard exceptions in title insurance refer to specific issues that are typically not covered by a title insurance policy. These exceptions often include items such as zoning laws, easements, and other limitations or claims that are known to affect the property but are not insurable risks under the policy. This means that while the title insurance provides protection against certain defects or issues, it does not cover every possible concern that could arise with the ownership or use of a property.

For instance, zoning laws dictate how a property can be used and may restrict certain types of development; these issues are outside the realm of what title insurance is designed to protect against. Easements, which grant others the legal right to use a portion of a property for a specific purpose, are also common exceptions because they are legally established rights that existing owners and buyers need to be aware of but do not represent defects in the ownership of the title itself.

Understanding these standard exceptions is crucial for property owners and buyers, as it informs them of the limitations of their title insurance policy and highlights the need for thorough due diligence when assessing a property.