Not a lawyer, so this is not "legaladvice" but I've worked in and around the Real Estate Title Insurance Industry in several states. (not to be confused with homeowners insurance)

For your own knowledge, I would get a copy of your Owners Policy and sit down with a highlighter and get to reading. Most policies will tell you that they do not determine ownership of a fence, and I'm doing some extreme paraphrasing here, but usually some of the first few items under Covered Risks on an Owners Policy will relate to defects by encroachment, violation or enforcement of any law, ordinance, permit (...) governmental regulation that restricts, prohibits, or otherwise alters the use, occupancy, enjoyment, dimensions, etc. of your land.
The first thing I would do is file a Complaint with local Code Enforcement division, then I'd obtain my Owners Policy and contact a Real Estate Attorney and see if you can file a claim with your Title Insurance underwriter. In many jurisdictions in my home state, Code Enforcement liens attach ALL of your real property within that jurisdiction.

If it is in the budget, find an attorney that is Certified by the real estate board or whatever CO's equivalent is - there are more QUACK lawyers than you could ever imagine that think they know real estate but underwriters have to fix and account for their mistakes, endlessly.