Final answer:
CLTA and ALTA title insurance policies protect against many risks but generally exclude zoning, environmental laws, undisclosed governmental regulations, certain forms of eminent domain, and issues known to the insured but not the insurer before issuing the policy. They also exclude issues that arise after the policy's effective date.
Step-by-step explanation:
The California Land and Title Association (CLTA) standard policy and the American Land and Title Association (ALTA) policy are designed to protect the insured against certain risks associated with purchasing real estate. However, there are specific risks that are generally not covered by these policies. These exclusions commonly include things like zoning laws, environmental protection laws, specific governmental regulations not disclosed in public records, native American tribal laws, and certain forms of eminent domain. Another key exclusion is defects, liens, or encumbrances that are known to the insured but not disclosed to the insurer prior to the issuance of the policy. Additionally, issues arising after the date of the policy like subsequent liens or financial encumbrances due to the insured's actions are typically not covered. It's important for policyholders to thoroughly understand these limitations when obtaining title insurance.