The policy arrives weeks after closing, usually in an envelope nobody opens, and it is the only document in the file that says in plain terms what the insurer agreed to defend and what it walked away from. Everything useful sits in two places: Schedule A, which names the insured, the amount, and the estate covered, and Schedule B, which lists the exceptions. The covered risks are printed on the jacket. A careful reader works backward, starting with the exceptions, because that is where a general promise becomes a specific one.
The claims the policy exists to pay
A forged deed in the chain is the textbook case: someone signed a conveyance they had no authority to sign, a notary stamped it, the recorder indexed it, and the record looked clean for years. Missed heirs run a close second, where an estate passed without probate or with an heir nobody located, and that heir later asserts an undivided interest. Unreleased liens are the most common by volume, usually an old mortgage paid off but never satisfied of record, a mechanic's lien filed after work, or a judgment or tax lien attaching to a same-named debtor. Each of these is a record defect existing at the policy date, which is the exact shape of a covered claim.
What Schedule B takes back out
Schedule B is where the search results become contract language, and it has two parts. The standard exceptions, printed in most jurisdictions, carve out rights of parties in possession, unrecorded easements, mechanic's liens not yet of record, and matters an accurate survey would disclose. The specific exceptions are the ones pulled from the search: a recorded utility easement across the rear ten feet, a plat note limiting driveway placement, an oil and gas reservation from 1948, recorded covenants running with a subdivision. Read every one of them against the survey and the appraisal, because an exception is a defect the insurer has already declined to insure.
The survey exception, and buying it back
Boundary and easement claims are the ones buyers care about most and the ones the standard survey exception most often defeats. If a neighbor's garage sits three feet over the line, or a gravel drive has been used openly for twenty years, that is a matter an accurate survey would disclose, and the exception stands. A current survey acceptable to the underwriter usually lets the exception be deleted, replaced by specific exceptions for whatever the surveyor actually found, which is a far narrower carve-out. The survey costs real money once. The encroachment costs money every time it comes up.
The exclusions nothing buys back
The exclusions on the jacket sit above Schedule B and apply no matter what the search found. Zoning, building codes, and land use regulation are excluded, so a policy will not pay because the house is a nonconforming use or the addition lacked a permit. Environmental protection and remediation are excluded on the same logic. Eminent domain is excluded unless notice was recorded. Most consequentially, matters created, suffered, assumed, or agreed to by the insured are excluded, along with matters known to the insured but not disclosed in writing to the insurer before the policy date. A buyer who knew about the fence dispute and stayed quiet has no claim on it.
What extended coverage adds
Extended or enhanced coverage, sold under various brand names built on ALTA forms, deletes standard exceptions and adds affirmative coverages: post-policy forgery, some building permit and zoning violations affecting existing structures, encroachments discovered later, access. It is priced as a percentage uplift and it typically requires a survey. The Consumer Financial Protection Bureau oversees the closing disclosure that shows what was charged and to whom, which makes it straightforward to compare what the enhanced form cost against the standard rate. Ask which exceptions the endorsement actually deletes, in writing, before agreeing to the upgrade.
When a claim does arrive, it arrives as a letter: a demand from an heir's attorney, a lien search failing on a refinance, a survey done by a neighbor. Notice goes to the underwriter promptly and in writing, with the policy number, and the duty to defend attaches to covered matters whether or not the claim ultimately succeeds. Keep Schedule B, the survey, and the endorsements together in one place. Ten years from now that folder is the whole argument.