There are a whole host of defects that can affect real estate that are protected by title insurance. For example, it could be an old lien that didn’t get released. There could be somebody who is claiming that they have an interest in the property.
One of the defects could be that someone is claiming adverse possession for a piece of your property. Typically, a title policy will have an exception excluding anything that a survey or inspection of the property would reveal. That is a standard exception. If you can get that removed, then you are suddenly insured for that defect.
If the neighbor has been cutting the lawn of a portion of your property and acting like it was his property, and this has gone on for 21 years, there may be a claim for adverse possession if the right elements exist. Of course, like the doctor who sees all the sick patients, I am the attorney who has seen these claims. Do they happen often? They don’t happen every day, but if they happen to you, that’s often enough.
Another defect that may be found after the closing relates to other people’s rights to access your property. Someone may have an easement that goes under your house or over your property which may affect the use or value of your land.
There is no time limit on title insurance. It doesn’t protect you for anything that happens to the property in the future, but it protects you for the past.
Therefore, you are protected from any defects that existed prior to closing even if the defects weren’t discovered until years after the closing.