What type of problems does a title policy typically not cover?

A title policy, also known as title insurance, is designed to protect property owners and lenders from losses due to defects in the title to real estate. The coverage primarily focuses on events and issues that existed before the policy was issued and are discovered during the title search process.

The reason that issues arising after the date the owner purchased the policy are typically not covered is that the title insurance only protects against problems that existed or were created prior to the purchase of the policy. Once the sale is completed and the policy is issued, any title issues that arise afterward would not be covered. This means if new liens are placed on the property or if someone else claims an interest in the property after the transaction, the title policy would not provide protection against those issues.

In contrast, problems arising from previous owners, adverse possession claims, and boundary disputes can represent title issues that may have occurred prior to the issuance of the policy, hence they could potentially be covered if they surface during the time the policy is in force. Understanding this context helps clarify the boundaries of coverage offered by title insurance policies, which is crucial for buyers and real estate professionals alike.