Title insurance protects the policyholder from any losses sustained from defects in the title. Here are some things you should know about title insurance:
1. It protects your ownership rights in your home, both from claims arising from the fraudulent acts of third parties and from errors and omissions made in the title search or that arose in prior transactions in the chain of title.
2. The premium for an owner's policy is a one-time cost which you pay when you acquire the property.
3. The rates for title insurance are fixed by law in New Jersey. The premium will be the same regardless of which title company you select. The premiums are based upon the price of the property. For example, the owner's premium on a $400,000 house is $1,685. The premium for an $800,000 house is $2,875. Search fees of approximately $250 are added to the premium.
4. All lenders require that their interests be insured by a mortgagee title insurance policy. However, the additional cost if the policy is issued simultaneously with the owner's policy, is only $25.
5. In Northern New Jersey, the title search and title policies are ordered by the lawyer who handles your purchase or refinance.