Short Answer
Title insurance protects you and your lender from financial loss if a title defect is discovered after closing. Unlike other insurance that covers future events, title insurance covers past events that were not found during the title search. Yes, you need it. Most lenders require a lender's title policy, and I strongly recommend buying an owner's policy to protect your investment. It is a one-time fee paid at closing.
Title insurance comes in two forms. The lender's policy protects the lender's investment in the property and is required by virtually all mortgage lenders. The owner's policy protects your equity and is optional but highly recommended. The owner's policy covers you for as long as you or your heirs own the property. It covers legal fees and losses if a covered title issue arises, such as an undiscovered lien, a forged signature on a previous deed, an undisclosed heir claiming ownership, or a mistake in the public records. The cost is a one-time premium paid at closing, typically based on the purchase price. In New Jersey, the buyer typically pays for both the lender's and owner's title policies. The cost varies but is generally a few hundred to a few thousand dollars depending on the purchase price. Given the protection it provides, it is money well spent.
Bob's Advice
Redfin Senior Agent · AI Certified Agent
I always recommend that my buyers purchase an owner's title insurance policy. It is a one-time cost that protects you for as long as you own the home. I have seen title issues surface years after a purchase, and having that policy saved the homeowner thousands of dollars in legal fees. It is one of those things you hope you never need, but you will be grateful for it if you do. At closing, you will sign for both policies, and I will make sure you understand what you are getting.
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