A title insurance policy is a promise about the past: as of the policy date, title was as represented, subject only to the specific exceptions listed in Schedule B. Disputes erupt when a defect surfaces after closing — an unreleased lien, a forged deed somewhere in the chain of title, an easement nobody disclosed, a boundary encroachment — and the insurer either denies the claim as excepted or excluded, or disputes when and how the defect actually arose. Because the policy insures against defects existing at the policy date, timing questions (was this lien recorded before or after closing?) are frequently as contested as the existence of the defect itself.

These cases also turn heavily on the duty to defend, which is broader than the duty to indemnify: an insurer generally must defend any claim that is potentially within coverage, even if it ultimately proves not to be. Insurers can also elect to cure a defect directly — paying off a lien, litigating to clear a cloud on title — rather than paying the insured's loss, and that election shapes the entire dispute. A secondary track involves negligence claims against the title agent or abstractor who conducted the search, which run alongside (and sometimes instead of) the policy claim itself.

The exceptions listed in Schedule B are the real battlefield — an insurer that properly excepted a recorded easement or unreleased mortgage owes nothing, no matter how much the defect harms the insured. That makes the dispute less about whether a defect exists and more about whether it was disclosed, discoverable, or excepted at the time the policy issued. Insurers also weigh the cure option carefully: paying to clear a lien is often cheaper and faster than litigating a denial, so a well-documented, clearly-covered claim tends to resolve quickly, while ambiguous exception language is where real litigation lives.