Do I Need Title Insurance?

When purchasing real estate, many buyers have questions related to title insurance. Some of the most commonly asked questions are: What is it? How much does it cost? Why do I need it?

What is Title Insurance?

Title insurance is a special type of insurance that covers ownership interests in a piece of real estate. The primary purpose of this type of insurance policy is to guarantee that the chain of title is “clean” and accurate.

Keys alone do not prove ownership; you also need proper title.

It also protects against financial losses that can result from any of the following potential problems:

  • Prior Fraud
  • Forged Deeds
  • Unrecorded Deeds
  • Liens
  • Unpaid Taxes
  • Encumbrances
  • Prior Claims of Right
  • Errors & Omissions
  • Other Title Defects

Every title policy, however, can come with different coverages and restrictions. This is why it is important to have an attorney review all title work and tile policies.

How Much Does it Cost?

In New Jersey, the state government regulates the costs associated with title insurance. Insurance providers must be licensed, and their fees are controlled by the NJ Department of Banking and Insurance.  The total cost is usually based on the property’s purchase price, the amount of the mortgage, and whether the buyer chooses to purchase an owner’s policy. The price of other related service fees are usually capped as well.

Why Do I Need Title Insurance?

There are many reasons why you may need a title insurance policy. If your purchase involves mortgage financing, the lender will likely require some type of title policy. This portion of the insurance, known as a lender’s policy, protects the mortgage holder’s interests. You may also wish to take out an owner’s policy. This type of policy will protect you personally, in addition to protecting the lender.

Contact Us

Tagliente & Shah, LLC, has helped many clients navigate various types of real estate transactions. Understanding title insurance is just one aspect of this complex process. Contact us today to learn more about how we can help in your next real estate purchase. Our firm would be happy to help you!