Two policies, two beneficiaries
A lender’s policy insures your mortgage lender’s lien position up to the loan amount and is required by virtually every lender. An owner’s policy insures your ownership up to the purchase price. The lender’s policy does nothing for you personally if a title claim arises.
What an owner’s policy covers
Covered risks typically include forged or improperly executed deeds in the chain, undisclosed heirs, recording errors, unpaid liens from prior owners, and defects a standard search could not reveal. Enhanced owner’s policies may add coverage for certain post-policy matters such as encroachments or building-permit violations. Coverage details are in the policy itself—ask for the specimen.
How New Jersey pricing works
Title insurance premiums in New Jersey are filed rates approved through the New Jersey Title Insurance Rating Bureau and regulated by the Department of Banking and Insurance. That means the premium for a given transaction is essentially the same across agencies. What differs is service: turnaround, communication, and how problems get solved.
Who chooses the title agency?
In New Jersey the buyer generally selects the title agency, often on the recommendation of their attorney or agent. You are not required to use a company suggested by a seller or builder, and federal RESPA rules prohibit a seller from requiring a particular title insurer as a condition of sale.
Is an owner’s policy worth it?
It is a one-time premium paid at closing with no renewals, and it protects your equity for as long as you or your heirs own the property. For most buyers it is one of the least expensive protections in the transaction.
One more tip
Keep your owner’s policy with your recorded deed. When you sell, providing the prior policy can sometimes reduce search time and cost.
This article is general information about New Jersey real estate transactions and is not legal, tax, or financial advice. Laws, regulations, and fee schedules change; confirm current requirements with your attorney. Crystal Alliance Title is a title insurance agency, not a law firm.
