Title Insurance & Your Preliminary Report, Explained

A few days after your offer is accepted, a document arrives that most buyers skim and set aside: the preliminary report. It is worth more of your attention than that, especially here. On a rural Siskiyou County property, the "prelim" is where you find out who else has rights to use your land, how you legally get to it and what the title insurance will and won't cover. This article walks through what title insurance is, how to read the report and what to look for on mountain and rural property.

This is general information as of 2026, not legal advice. If something in your report raises a real question, a real estate attorney is the right person to ask.

What title insurance does

Title insurance protects against problems with ownership that already exist when you buy but that nobody caught: a forged signature somewhere back in the chain of deeds, an heir who was never accounted for, a recorded lien that was missed. Unlike most insurance, you pay once, at closing, and the policy looks backward rather than forward.

There are two kinds of policy in most sales:

• The owner's policy protects you. According to the California Department of Insurance, it insures the buyer for as long as they own the property, and it should be written for the full purchase price.
• The lender's policy protects your lender, not you. If you are financing, your lender will require one. The Department of Insurance is blunt on this point: a lender's policy does not protect you.

Title insurers in California must file their rates and policy forms with the Department of Insurance. Who pays for each policy is set by county custom and by your purchase contract; our article on closing costs and escrow covers how that usually works in Siskiyou County. Everything there is negotiable.

If you refinance later, your new lender will usually want a new lender's policy. Your owner's policy stays in place for as long as you own the home, so there is no need to buy a second one.

Standard, extended and homeowner's coverage

You will hear two sets of initials: CLTA (California Land Title Association) and ALTA (American Land Title Association). Both publish standard policy forms.

• A standard coverage policy insures against matters in the public record. It lists "standard exceptions" for things the title company can't see from the records, such as unrecorded easements, boundary problems a survey would show and the rights of people in possession.
• An extended coverage policy removes some of those standard exceptions, which is why lenders usually require one for their own policy.
• A homeowner's policy is a form available for many one-to-four unit homes. It adds a list of specific protections beyond the standard policy.

Which form you can get depends on the property. Vacant land, larger acreage and unusual parcels often qualify only for a standard policy, which is exactly why reading the exceptions matters so much on rural property. Ask the title officer which owner's policy is available for your parcel, what it adds over a standard policy and whether broader coverage would require a survey.

What the preliminary report is, and what it isn't

The preliminary report is the title company's offer to insure. Under California Insurance Code section 12340.11, it is a statement of the terms on which the company is willing to issue a policy. It is not a representation of the condition of title and not an abstract of every recorded document. In plain terms: it tells you what the policy will cover and, more importantly, what it won't.

A typical report includes:

1. Vesting: who currently owns the property and how they hold title.
2. Legal description: the parcel being insured, by lot, map or metes-and-bounds description.
3. Property taxes: current installments, any delinquencies and special assessments.
4. Exceptions: everything recorded against the property that the policy will not insure against. This is the section to read line by line.
5. Requirements: what the title company needs before closing, such as payoff of the seller's loan, a trust certification or a court order.

Your purchase contract gives you a set period to review and approve the report. Read it early. If an exception worries you, ask for a copy of the underlying document; the title company can provide it.

What to look for on rural Siskiyou County property

On an in-town lot, the exceptions are usually routine: utility easements, the subdivision map and recorded CC&Rs. On rural and mountain property they carry more weight.

Access

Being able to drive to a parcel is not the same as having a legal right to. Look for a recorded easement or public road that connects the property to a county-maintained road. If the only route crosses a neighbor's land with no recorded easement, that is a problem to solve before closing, not after. Ask, too, whether there is a road maintenance agreement. Private roads in the forest subdivisions and foothills are plowed, graded and repaired by someone, and a recorded agreement tells you who and how the costs are shared.

Easements running across the property

Power lines, phone lines, ditches, shared driveways and pipelines often have recorded easements. Look at where they run and how wide they are, especially if you plan to build, fence or add an outbuilding.

Water rights and ditches

Some properties have recorded water rights, ditch rights or shared well agreements; others have ditches crossing them that serve someone else. The preliminary report shows only what is recorded. Some California water rights, such as riparian and pre-1914 rights, exist without any state permit, so they may not appear in the county records at all. Standard title policies commonly list water rights as an exception, so don't count on the policy to protect them. Ask the title officer how your policy treats water. If water is part of why you are buying, treat it as its own question. Our guide to wells, septic and water covers the practical side.

Mineral, timber and other reservations

Older deeds sometimes reserved minerals, timber or other rights to a prior owner. Federal land patents, the original grants that moved land from the government into private hands, often contain reservations of their own. These show up as exceptions. Most are old and never exercised, but you should know they are there and ask what they mean for your plans.

Liens and unfinished work

California lets contractors and suppliers record a mechanics lien for unpaid work. Under Civil Code sections 8412 and 8414, a contractor generally has up to 90 days after a project is completed to record one, or 60 days after the owner records a notice of completion. Other claimants, such as subcontractors and suppliers, get 30 days after that notice. So if the seller recently remodeled, added a deck or replaced a roof, a lien may not show up in the report yet. Ask the seller for proof that everyone was paid, and let the title officer know about the recent work.

Boundaries and encroachments

A standard policy will not tell you that the neighbor's shop sits three feet onto your parcel. On acreage with old fence lines, consider a survey. It is the tool that finds boundary and encroachment problems, and title coverage for them usually depends on one.

When something in the report is a problem

Most exceptions are normal and harmless. When one isn't, there are usually options:

• The seller clears it before closing, for example by paying off a lien or recording a missing easement.
• The title company agrees to insure over it or adds an endorsement.
• You negotiate a price or term change to reflect it.
• If it can't be resolved and your review period is still open, you may be able to cancel under the terms of your contract.

We read every preliminary report with our buyers and flag anything that needs a second look. Wondering about a specific parcel? Contact us, or browse current listings and communities to see what's available. New to buying here? Start with our step-by-step guide to buying in Siskiyou County.

Sources

• California Department of Insurance: Title Insurance consumer guide
• California Insurance Code section 12340.11 (preliminary reports)
• California Civil Code section 8412 (mechanics lien recording deadlines)
• State Water Resources Control Board: Water Rights FAQs
• University of California Office of the President: Title insurance in California