The state of New Jersey does not legally require that you buy title insurance for real estate purchases, but it is still highly recommended that you do, as the benefits of having it far outweigh the (often unforeseen) risks that may present themselves in the future.
Should said risks emerge, buyers without title insurance will potentially be vulnerable to unexpected financial issues, ownership disputes and other unwelcome scenarios, all of which are likely to leave you with debilitating financial and personal ramifications.
What Is Title Insurance?
In short, title insurance protects owners and lenders from losing a property due to title defects (such as fraud, liens and other errors), while also covering costs for defending against any future claims.
Further details can be found in our blog post What is Title Insurance?
Why Should I Get Title Insurance?
For many, the purchase of a home is one of the largest investments they will ever make.
Because of this, protecting yourself and your home from unforeseen issues is of paramount concern, and having title insurance is one of the best ways to do so.
With title insurance, you can feel relief knowing that you have a safety net for unanticipated dilemmas or obstacles, leaving you with more time and energy to enjoy your home.
Although title insurance does not completely nullify every kind of threat, it does go a long way in effectively allaying many of the most devastating situations, such as the following:
- Claims of ownership by another party
- Undisclosed heirs
- Incorrect signatures on documents, as well as forgery and fraud concerning title documents
- Defective recordation (flawed records or record-keeping)
- Restrictive covenants (terms that reduce value or enjoyment), such as unrecorded easements
- Deeds and wills by persons lacking legal capacity
- Issues of rightful possession of the land
- Rights of divorced parties
- Encumbrances or judgments against property, such as outstanding lawsuits or liens
- Defective acknowledgments due to improper or expired notarization
What Are The Risks of Not Having Title Insurance?
Title Insurance allows you to confidently mitigate the issues described above, should you ever find yourself confronted by them. Unfortunately, the same cannot be said for those without the coverage.
Being uninsured puts owners in tremendous jeopardy, opening the door for everything from financial ruin to even losing ownership of their home.
When faced with the possibility of such severe consequences, the benefits of title insurance shine even brighter than before.