FAQ
Title Insurance FAQ
You will find answers to frequently asked questions on this section of our website.
Q: What is Title insurance?
A: It is different from other kinds of insurance. The purpose of title insurance is to protect you from past events. The majority of insurance covers future events. You only have to pay once for title insurance. This policy is not billed on a monthly or annual basis.
Q: What are some common title defects?
The following is a list of the most common hidden risks that can result in title encumbrances or loss of title:
- Legal documents recorded incorrectly
- Omitting or failing to identify heirs
- to unpaid inheritance, estate, income, or gift taxes
- Fraudulent deeds, releases, or wills
- A misinterpretation of a will
- Deeds committed by persons not of sound mind, by minors, or by persons allegedly single but actually married
- Possession of real property in the name of someone other than its true owner
- Execution of documents under an expired or invalid power of attorney
If one of these events occurred before you bought the property, title insurance will protect you from claims arising from it.
Q: What are the different types of Title policies?
Anyone with an interest in the property is required to obtain title insurance. Residential properties require coverage from both owners and lenders. Loans require coverage only from mortgage lenders. Your lender's policy face amount decreases if you pay off your mortgage. With an owner's policy, you can protect your largest asset, your home. Getting title protection from your attorney is a good idea. You should consider adding an inflation rider to your owner's policy or adding an endorsement for surveys. You should read the policy's title binder before it is issued so you are aware of the restrictions.
Q: Am I required by law to have Title insurance?
No, you do not have to have Title insurance. If you do have a defective Title, you are opening yourself up to a lot of potential personal loss. It is important to remember that Title insurance protects you from events that have already happened in the past. The lender will almost always require you to buy a loan policy if you have a mortgage on the property.
Q: So, if you do your job so well then why do I need Title insurance?
In other words, Title insurance is designed to protect your right to ownership against legal challenges that could be brought against you by erroneous or illegal transfers of Title. Your Title Insurance will cover your legal costs and any judgment-related costs up to the limits of your policy. This is why we are the best at what we do. Before a purchase is made, it is our responsibility to ensure the title is clear. The purpose of title insurance is to protect you in the rare instance that you are not able to spot a potentially problematic issue.
Q: Are there any options available on Title insurance policies?
Survey endorsements are most commonly requested by homeowners. Survey endorsements state that the property is covered as described in the survey and does not include the items that were specifically excluded in the survey.
Q: Does the amount of coverage I have go up as my property value goes up?
Market values do not increase the coverage amount. Probably your basic policy includes the cost of living adjustments, but if you want more coverage, you should consider an inflation rider.
Q: How much does Title insurance cost?
The State of New Jersey sets the rates for Title insurance. In other words, the premium or cost of coverage does not differ from one agency to another. Remember that if your current policy is old and other factors apply, you may qualify for a reissue rate. Often, there are local recording fees in addition to the title insurance premium.
Q: Who pays for Title insurance?
The insurance premiums for the owner's and lender's policies are generally paid by the buyer. Closing costs usually include insurance premiums. A nominal fee is added to the owner's policy in New Jersey to cover the lender's cost.
Q: What is Title insurance?
Title insurance is a policy that protects against loss, should the condition of the title to your land be other than what was insured. In other words, it makes sure that you get what you pay for, or that you are compensated if you do not.
Q: Why do I need Title insurance?
When you purchase a home or any piece of property, your ownership guarantees certain benefits. You can, for example, live on your property and use it as you wish. You should be free of any financial obligations or debts not created or entered into by you. Finally, you should be able to then sell your new property or pledge it as loan security. Title insurance protects these rights.
Q: What if an issue comes up? Do I have to lose the property before I can file a claim?
Certainly not. If you even suspect the existence of a claim that is adverse to your title, you should contact your title company or the agent who insured you. Title insurance will help pay for legal expenses necessary to investigate, litigate, or settle said claims.
Q: What does this cost?
The cost of title insurance varies due to a number of factors, most prominently the value of your property. Bear in mind that you will only pay once for coverage that will continue for as long as you own or have an interest in your property. If you die, the coverage will continue for your beneficiaries. If you sell the property, transferring the title warranty to your buyer, your coverage will continue. It will also continue if said buyer gives you a mortgage to finance their purchase of your property;
Q: If my lender's mortgage is covered by title insurance, why do I need my own policy?
The lender's insurance only covers the amount of their loan, not the property's overall value. If there is eventually an adverse claim, the loan could become non-performing and could threaten the lender's opportunity to foreclose and recover its interests.