Which of the following is a common exclusion in title insurance policies?

In title insurance policies, common exclusions are important to understand as they delineate the limits of coverage provided by the insurance. One such exclusion involves known defects disclosed prior to policy issuance.

This exclusion is crucial because title insurance is meant to protect buyers and lenders from unforeseen issues that could affect their ownership rights. When a defect is known and disclosed before the issuance of the policy, the insurance company cannot be held liable for that deficiency. It is essential for policyholders to be aware of any previously disclosed issues when purchasing title insurance, as they may face risks if these defects become problematic in the future.

In contrast, unreported ownership changes, title claims submitted after selling the property, and historical liens that are no longer active do not always fall under the common exclusions. Unreported ownership changes might still be covered if such changes were not adequately recorded. Title claims filed after selling may not be applicable since coverage typically extends only to the duration of ownership, while historical liens that are no longer active may not impact the current title status, depending on the jurisdiction's rules on lien resolution. Thus, understanding the scope and exclusions of title insurance is vital for ensuring adequate protection and informed ownership.