Title Insurance in New Jersey: What It Is and Why You Need It

What Is Title Insurance?

Title insurance is a form of indemnity insurance that protects real estate buyers and mortgage lenders against losses arising from defects in a property's title. Unlike other forms of insurance that protect against future events, title insurance protects against past events — problems with the chain of title that existed before you purchased the property.

What Can Go Wrong With a Title?

Even after a thorough title search, problems can surface after closing, including:

• Forged deeds in the chain of title
• Undisclosed heirs who claim an interest in the property
• Errors in public records — clerical mistakes in deeds or court judgments
• Unpaid liens — contractor liens, tax liens, or judgment liens that were not discovered
• Boundary disputes and encroachments
• Fraudulent conveyances — prior transfers made to defraud creditors

Types of Title Insurance Policies

The lender's policy protects only the lender's interest up to the loan amount. An owner's policy protects your full equity in the property.

How Much Does Title Insurance Cost in New Jersey?

Title insurance in New Jersey is a one-time premium paid at closing. The cost is based on the purchase price of the property and typically ranges from $500 to $2,000 for an owner's policy. Unlike other insurance, there are no ongoing premiums — the policy remains in effect for as long as you own the property.

Why You Should Always Get an Owner's Policy

Many buyers skip the owner's policy to save money at closing. This is a mistake. The cost of defending a title claim — even a meritless one — can far exceed the cost of the policy. If a claim is valid, you could lose your entire investment in the property.

---

This article is for general informational purposes only and does not constitute legal advice.