Is Enhanced Title Insurance Needed for Your NJ Home Purchase?

Allison Ziefert Homes May 17, 2024

When you purchase a home or property in Essex, Morris, Union County, New Jersey, title insurance protects you and your lender from financial loss sustained from defects in the title to a property. It ensures that the buyer has clear ownership of the property and that there are no hidden liens, encumbrances, or other issues that could affect the title’s validity.

Standard Owner’s Title Insurance typically covers “the past”:

Forgery and fraud
Undisclosed heirs
Errors in public records
Incorrect legal descriptions
Prior liens or encumbrances not of record
Encroachments, overlaps, or boundary disputes

Title insurance rates are set by the state.

Enhanced Owner’s Title Insurance offers additional protections for “the future”, including:

Post-policy forgery and fraud that impact your title after closing
Building permit violations from previous owners
Covenants, conditions, and restrictions violations
Post-policy encroachments (such as a neighbor building a fence on your property)
Zoning law violations
Certain living trust coverage
Inflation coverage (automatic increase in coverage amount over time)

These policies cannot be purchased retroactively, and they cost about 20% more than the standard policy.

Local real estate attorneys whom we have conferred with differ in their opinions on these policies. Some say that they are not worth the extra expense, and others recommend them for every client.

In summary, while a standard owner’s title insurance policy offers essential protection, an enhanced policy can provide additional safeguards that might be valuable depending on your specific circumstances and risk tolerance. It’s often a good idea to discuss the options with your real estate attorney or title insurance agent to understand the best choice for your situation.

The Allison Ziefert Real Estate Group is a top-producing real estate team based at Compass in Short Hills, New Jersey. We are local market experts, specializing in real estate and homes in Maplewood, South Orange, Millburn/Short Hills, Montclair/Glen Ridge, West Orange, Morristown, and the surrounding New Jersey towns. We’ve also got you covered coast to coast with the best connections to top agents around the country in any market you are exploring. We are driven by earning great testimonials and referral business from happy clients.