Schedule B Of The Owner's Policy
Schedule B of the owner's policy lists matters which are not embraced within the insurance of a particular parcel of land.
In an owner's policy, Schedule B is divided into two parts, the general and the special exceptions. The general exceptions state those matters which are excluded from coverage generally. These matter are either not within scope of the matters examined by the title insurer in preparation of the issuance of the title insurance policy or they would not be reflected by an examination of the public records. The special exceptions are exceptions relating to defects, encumbrances, liens, covenants, restrictions or other matters affecting only the particular property being insured.
The "general" exceptions are sometimes referred to as "standard" or "preprinted" exceptions. In most instances there are five such exceptions. In certain states the number may increase in order to include matters of "mining claims", "water rights", "patent reservations", restrictive covenants", "spousal rights," etc. The general exceptions may be eliminated from an owner's title insurance policy. The deletion of any or all of the "general", "standard", or "preprinted" exceptions from the owner's policy is considered "extended coverage." Certain procedures must be followed and certain requirements must be met in order to accomplish said deletion. (See Extended Coverage 5.32).
Schedule B of an ALTA Owner's Policy reads as follows:
- 1970 Policy
This policy does not insure against loss or damage by reason of the following exceptions:
- 1987 and 1990 Policy
This policy does not insure against loss or damage (and the Company will not pay costs, attorneys' fees or expenses) which arise by reason of:
Rights or claims of parties in possession not shown by the public records.
Encroachments, overlaps, boundary line disputes, and any other matters which would be disclosed by an accurate survey and inspection of the premises.
Easements or claims of easements not shown by the public records.
Any lien, or right to a lien, for services, labor, or material heretofore or hereafter furnished, imposed by law and not shown by the public records.
Taxes or special assessments which are not shown as existing liens by the public records.
Note: It is imperative to understand the meaning, scope and limitations of each of the above exceptions.