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               Introduction to Title Insurance

What is Included in the Policy

The title insurance policy itself is divided into five parts: the
Insuring Provisions, the Exclusions From Coverage, the
Conditions and Stipulations, Schedule A, and Schedule B.  If the
insured party requested endorsements to the title insurance
policy and paid the requisite additional premium then the
endorsements will also be included as a sixth part to the policy.  
The Insuring Provisions, the Exclusions From Coverage, and
the Conditions and Stipulations are standardized form
provisions that are uniformly incorporated into all title insurance
policies in the preprinted, form portions of the title insurance
policy called the “jacket.”  Schedule A, Schedule B, and the
Endorsements, if any endorsements are part of the policy, are
separate pages specifically prepared for each title insurance
policy and they are added to the preprinted jacket.

The Insuring Provisions:
The Insuring Provisions are often found on the front cover of
the preprinted policy jacket and they detail what types of risks
are covered by the title insurance policy.  If a loss is not a result
of an insured risk described in the Insuring Provisions, then the
title insurance policy will not cover such loss.  The insured risks
described in the Insuring Provisions include, but are not limited
to, the following: title to the insured interest actually being other
than as described in the title insurance policy, undisclosed title
defects that are not excluded from the title insurance coverage,
lack of legal access to the real property, the unenforceability of
the insured mortgage, and the loss of priority of the insured
mortgage because of the existence of an undisclosed and
superior lien.  

The Exclusions From Coverage:
The Exclusions From Coverage are also often found on the
front cover of the preprinted policy jacket and they detail what
types of risks are excluded from the coverage of the title
insurance policy.  If a loss is a result of an uninsurable risk
described in the Exclusions From Coverage then the title
insurance policy will not cover such loss.  The uninsured risks
described in the Exclusions From Coverage include, but are not
limited to, the following: any public law, ordinance, zoning
regulation, or governmental regulation affecting occupancy,
use, dimensions, or physical characteristics of the property;
rights of eminent domain; defects or encumbrances that were
created or agreed to by the insured, resulted in no loss, or
attached subsequent to the date of the policy; and the
unenforceability of the insured mortgage because of the failure
of the insured to comply with the applicable “doing business”
laws of the state where the property is located, usury
protections, or any statutory lien for services, labor or materials
(or claim of priority of such lien) arising from an improvement
which is contracted for and commenced subsequent to the
effective date of the policy.

The Conditions and Stipulations:
The Conditions and Stipulations are often found on the back of
the front cover of the preprinted policy jacket and they detail
terms and requirements of the title insurance policy coverage.  
The Conditions and Stipulations are the operational provisions
of the title insurance policy and they include, but are not limited
to, the following: the requirement that the insured party notify
the insurer underwriting the title insurance policy of any
potential claims the insured may make against the policy and
strict requirements for such notices, a statement of the right of
the insurer underwriting the title insurance policy to assume the
defense of any claims that are made against the property
interests insured by the title insurance policy, the requirement
that the insured provide a proof of loss to the insurer
underwriting the title insurance policy when the insured makes a
claim against the policy, and a statement of the right of the
insurer underwriting the title insurance policy to settle claims
against the property interests insured by the title insurance
policy.

Schedule A:
Schedule A is the first non-form part of the insurance policy that
is specific to that particular insurance policy.  Schedule A is a
separate insert page that is specifically prepared for a title
insurance policy and it is added to the preprinted jacket.  
Schedule A includes basic information related to the title
insurance policy including, but not limited to, the following: the
policy number, the effective date of the policy, the amount of
insurance or policy limit permitted by the title insurance policy,
the name of the party insured by the title insurance policy, and
the legal description of the real property covered by the title
insurance policy.

Schedule B:
Schedule B is the other non-form part of the insurance policy
that is specific to that particular insurance policy.  Schedule B is
also separate insert pages that are specifically prepared for a
title insurance policy and are added to the preprinted jacket.  
Schedule B includes the matters and instruments that were
discovered by the examination of the Public Records which
affect the real property interest that is insured by the title
insurance policy and therefore are excluded from the coverage
of the policy.

Endorsements:
Endorsements are additional riders to the title insurance policy
that provide insurance coverage for losses that would normally
not be covered by the standard title insurance policy.  
Endorsements must be requested by the insured party and the
issuance of endorsements typically includes the payment of
additional premiums.

                                                         Return to Introduction to Title Insurance
Law Office of
Craig W. Little, P.A.