Does title insurance cover encroachments? Only if you bought the right kind. A standard owner’s title insurance policy excludes encroachments through what’s called the survey exception. An enhanced owner’s policy, sometimes called an extended policy, removes that exception and specifically covers scenarios like being forced to tear down a structure that crosses onto a neighbor’s land. If your lender required title insurance at closing, that policy protects the lender only and does nothing for you.
What Counts as an Encroachment
An encroachment is a physical structure on one property that crosses the boundary onto an adjacent property. It can be obvious, like a fence two feet past the line, or hidden, like a foundation footing that extends underground into a neighbor’s lot. Driveways that overlap a boundary, rooflines that overhang, retaining walls on the wrong side, and underground utilities or septic lines that cross property lines all qualify.
Encroachments create real problems. They can block a future sale, trigger a neighbor’s lawsuit, or, if left alone long enough, lead to an adverse possession claim that strips you of ownership over the affected strip.
Why Standard Policies Leave Encroachments Out
A standard owner’s policy protects against defects hidden in the public record: a forged deed in the chain of title, an undisclosed lien from a prior owner, a recording error at the county office.1Consumer Financial Protection Bureau. What Is Owner’s Title Insurance? It covers you for the purchase price of your home and stays in effect as long as you own an interest in the property.2National Association of Insurance Commissioners. The Vitals on Title Insurance: What You Need to Know
The gap is the survey exception. Every standard ALTA owner’s policy includes a blanket exclusion for anything a current, accurate survey would disclose. Encroachments, boundary overlaps, and setback violations all land inside that exclusion.3National Society of Professional Surveyors. 2026 ALTA/NSPS Standards The title company’s reasoning: they searched the public records and insured what they found there. Physical conditions on the ground are a different category of risk.
Many buyers assume “title insurance” covers all title-related problems, boundary disputes included. At the standard level, it doesn’t.
What an Enhanced Policy Actually Covers
The ALTA Homeowner’s Policy is a separate product. It removes the survey exception and adds specific covered risks that reach beyond public records. Enhanced policies typically cost around 10% more than standard policies.
The 2021 ALTA Homeowner’s Policy form addresses encroachments in four places:4American Land Title Association. ALTA Homeowners Policy of Title Insurance 2021
- Covered Risk 21 pays your loss if you’re ordered to remove part of your home or other improvements because they encroach onto a neighbor’s property. For boundary walls and fences specifically, coverage is subject to a deductible and a maximum liability cap that may be less than the full policy amount.
- Covered Risk 22 pays if a buyer, tenant, or lender walks away from a transaction because a neighbor’s existing structure encroaches onto your land.
- Covered Risk 23 covers you when your existing structures encroach onto an easement or across a building setback line, even if that easement or setback is listed as an exception in Schedule B.
- Covered Risk 28 covers you if a neighbor builds a new structure (other than a boundary wall or fence) that encroaches onto your land after the policy date.
The boundary wall and fence carve-out matters. Those structures carry a deductible and a dollar cap, while larger structural encroachments are covered up to the full policy amount. Fence disputes are common and often minor; a garage foundation across a line is rarer and far more expensive to fix.
The Survey Requirement and the Schedule B Trap
Before an insurer will issue an enhanced policy with the survey exception removed, they need to know what’s on the ground. That means an ALTA/NSPS Land Title Survey, a standardized format developed jointly by the American Land Title Association and the National Society of Professional Surveyors.5American Land Title Association. 2026 Minimum Standard Detail Requirements for ALTA/NSPS Land Title Surveys An ALTA survey maps boundaries precisely, locates every improvement, identifies easements, and flags visible encroachments. Residential ALTA surveys typically run between $2,500 and $10,000, depending on size, terrain, and complexity.
Here’s the catch. Anything the survey reveals becomes a known condition, and the insurer will list it as a specific exception on Schedule B of your policy. If the survey shows your deck extends 18 inches onto the neighboring lot, that deck encroachment goes into Schedule B and is not covered. The enhanced policy protects you against encroachments that weren’t visible or known at closing, not ones already on the record.
Covered Risk 23 is the partial exception: it covers your structures encroaching onto an easement or over a setback even when that easement or setback is a Schedule B exception.
Check Which Policy You Actually Hold
If your mortgage lender required title insurance at closing, that policy almost certainly protects only the lender. A lender’s policy covers the bank’s interest in the property. It does nothing for you as the homeowner.1Consumer Financial Protection Bureau. What Is Owner’s Title Insurance?
An owner’s policy is a separate purchase and, in most transactions, optional. Three scenarios:
- You skipped the owner’s policy at closing. You have no title coverage for encroachments or any other title defect.
- You bought a standard owner’s policy. You’re covered for record defects but not encroachments.
- You bought an enhanced owner’s policy. You have encroachment protection, subject to the Schedule B exceptions and the fence and wall sublimits.
Pull your closing documents before you do anything else. If you can’t find the policy, your mortgage lender or the closing agent can usually point you to the title company that issued it.
How to File a Claim
If you hold an enhanced policy and discover an encroachment that isn’t listed as a Schedule B exception, the policy is designed to respond. Notify the title company promptly. Your notice should include the property address, a description of the encroachment, copies of any survey or correspondence with your neighbor, and a copy of your policy.
Prompt notice matters. Most policies require you to report a claim within a reasonable time after discovering the issue. In many states, an insurer can’t deny a claim solely for late notice unless the delay actually harmed its ability to investigate, but some states treat timely notice as a strict condition of coverage. Don’t test it.
What the Insurer Does
Title insurance works differently from homeowner’s insurance. The title company doesn’t just write you a check. The insurer has a duty to defend you, meaning they provide and pay for legal counsel if the encroachment leads to litigation, and they cover court costs and related legal expenses on the covered claim.
Beyond defense, the insurer may negotiate directly with the neighbor or the neighbor’s title company. Resolution can take several forms: paying for removal and reconstruction of the encroaching structure, negotiating an easement that lets it remain, or compensating you for the resulting loss in property value. The insurer picks the approach that resolves the risk at the lowest cost, up to the policy’s face amount.
Why Claims Get Denied
The most common denial reason is that the encroachment was already identified on the survey and listed as a Schedule B exception. If you bought the property knowing the neighbor’s shed was two feet over the line, that’s a known condition the insurer explicitly excluded. Other common denials: holding only a standard policy (no encroachment coverage at all), holding only a lender’s policy (no coverage for you personally), or discovering an encroachment that existed before the policy date but wasn’t flagged because no ALTA survey was done.
A Note on Adverse Possession
Title insurance has a limit the policy language itself can’t fix. An encroachment that sits unaddressed for years can evolve into an adverse possession claim, where a person who openly, continuously, and exclusively occupies someone else’s land for a statutory period can eventually claim legal ownership. The required time varies widely by state, from as few as three years in some circumstances to 20 years or more in others.
If a neighbor’s driveway has sat three feet onto your property for 15 years with no objection, that neighbor may already have a viable claim. Title insurance won’t undo an adverse possession claim that has already ripened. The policy protects against title defects and encroachments discovered after purchase, not against a neighbor who has already acquired legal rights through decades of uncontested use. If a survey turns up a boundary issue, acting on it quickly, through an easement, a boundary line adjustment, or removal, keeps that clock from running.