A standard form of title insurance policy likely does NOT protect against loss resulting from?

A standard form of title insurance policy likely does NOT protect against loss resulting from?

• A. Encroachment on the property
• B. Forgery in the chain of title
• C. Lack of capacity of the grantor
• D. Undisclosed liens or encumbrances

Answer: (A)

A standard form of title insurance policy is designed primarily to protect policyholders against losses that may arise from defects in the title to real property. Encroachment on the property refers to the intrusion of a structure or improvement from an adjacent property onto the insured property. While encroachments can certainly affect property rights and potentially lead to disputes, they are typically not covered by a standard title insurance policy because they often fall under matters that are visible or apparent upon inspection of the property. In contrast, forgery in the chain of title, lack of capacity of the grantor, and undisclosed liens or encumbrances represent risks that a title insurance policy is specifically designed to cover. Forgery can lead to claims against the title that are outside the owner's control, lack of capacity can mean that a transaction is not valid, and undisclosed liens may create unforeseen financial obligations by affecting the ownership rights. Each of these issues can create substantial, hidden risks that a title insurance policy aims to protect against, whereas encroachments are usually a matter that can be resolved through boundary surveys or negotiations with neighboring property owners.

A standard form of title insurance policy is designed primarily to protect policyholders against losses that may arise from defects in the title to real property. Encroachment on the property refers to the intrusion of a structure or improvement from an adjacent property onto the insured property. While encroachments can certainly affect property rights and potentially lead to disputes, they are typically not covered by a standard title insurance policy because they often fall under matters that are visible or apparent upon inspection of the property.

In contrast, forgery in the chain of title, lack of capacity of the grantor, and undisclosed liens or encumbrances represent risks that a title insurance policy is specifically designed to cover. Forgery can lead to claims against the title that are outside the owner's control, lack of capacity can mean that a transaction is not valid, and undisclosed liens may create unforeseen financial obligations by affecting the ownership rights. Each of these issues can create substantial, hidden risks that a title insurance policy aims to protect against, whereas encroachments are usually a matter that can be resolved through boundary surveys or negotiations with neighboring property owners.