Title insurance policies are indemnity insurances against financial loss caused by defects in title to real property and from the invalidity or unenforceability of mortgage liens. Title insurance exceptions are found in every title policy. There are some standard exceptions in every policy and there are sometimes exceptions unique to a particular real estate deal. The exceptions mentioned in the policies will be excluded from coverage. Standard exceptions can include (but are not limited to):
- Survey matters
- Taxes or special assessments not shown by public record
- Rights or claims of parties in possession not shown by public record
- Mechanic's liens not shown by public record
Depending on the particular circumstances of the deal, there can be other exceptions, such as judgments, liens and breaks in the chain of title. Some of these exceptions can be dealt with quite easily. For example, if the parties obtain a survey, the survey exception can be removed.