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Is Title Insurance Required by the Owner in New Jersey ?

When you buy a house, you take certain risks. The previous owner may not have compiled the documents properly or may have been involved in fraudulent activity related to the property. Home insurance protects you from problems with your ownership of property that may arise after buying a home. You can find the best title insurance company in NJ via http://www.clearskiestitle.com.

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Some of these potential problems are:

  • Incorrect File Submitted: If there is an error in the document that is not written in your legal name, property owners may not be clear.
  • Mortgage Fraud: The previous owner can show that the mortgage was paid when it wasn't, causing the previous lender to issue a foreclosure.
  • Arrest Rights: This is a debt statement filed against the property. 
  • Violation: If property lines are unclear and neighbors erect fences or outbuildings on your property, this will affect your property rights and protect you from existing repairs that encroach on their property.
  • Convenience: Other people may have rights to some of your property, but this was not found during the purchase process.

In all these cases, a third party may try to sue your property. Title insurance helps reduce the risk for buyers who are unaware of the problem. Even if the title search is completed prior to purchase, the problem may not appear until you own the property.

In some cases, title insurance is not mandatory. Owner's property insurance is often confused with lender's insurance, which is usually required to cover your mortgage loan. There is no law that requires you to have an additional policy to cover your potential losses.