Why Title Insurance is Worth the Cost

title insurance cost

For many of us, the details of purchasing a home are part of an unfamiliar process. Sure, you have whomever you assembled as your professional team to help you through the purchase, but most of us never make it past the rookie stage of home buying knowledge and experience. Part of the challenge is we rely on the professionals we work with to guide us through any obstacles in the process. The other part is that we don’t buy homes that often. For example, would you know the difference between a deed vs. a title unless you had help?

In your home buying process, you will have the opportunity to consider the costs of the transaction. There will be some items you may not understand and some that are obvious. One of the less familiar parts of the home buying process is title insurance. Here is the experts at our title agency in New Jersey why this little-known coverage is unquestionably worth the low cost.

Story Time – The Owner Who Declined Title Insurance

Let’s say you purchase a property and decide not to pay for title insurance to save a few dollars against your realtor’s advice. Everything appears to be okay with the home for the next five years until a new neighbor moves in and starts driving across a far corner of your property. You find out he is using the access to get to a part of his property. You confront him, and he says he has an easement that allows him to cross your property to access his. This leaves you upset and confused.

Title Companies Look for Potential Problems With Titles Before Issuing a Policy

A title company would have very likely discovered the easement before you finalized your purchase if you had elected title insurance. At that point, you would still have time to either back out of the transaction or renegotiate the sales price and move forward.

If you had title insurance, the title company would help resolve the issue by working with all parties involved. With no title insurance, you won’t have any help from the title company. And aside from a depreciation in the value of your property, you may be more upset that you didn’t get what you paid for, and you sure didn’t pay for your new neighbor to drive through your property.

Now, your only recourse might be to sue your neighbor. However, a lawsuit could cost thousands of dollars in legal fees alone. That doesn’t even account for the loss of property value. Fortunately, title insurance is a one-time fee that costs a small percentage of the purchase price. Your policy will cover you until you no longer own the property.

Policies can start as low as $500 and go up based on what you insure. You’re spending pennies on the dollar for title insurance to avoid potentially losing tens of thousands. A clear title will also increase the saleability of your property down the road.

So, In summary:

  1. Owner declined to carry title insurance to save $1,000 against the advice of their realtor.
  2. The owner later found out the property has an easement they were unaware of.
  3. Owner is upset because they feel they paid for a private piece of property that now has regular vehicle traffic. Their neighbor is building a shop on the parcel, which will also be visible to the already distressed owner.
  4. Owner has no remedy through the title insurance company.
  5. Owner has to spend thousands of dollars to litigate the situation in court with no guarantee of success in the suite.
  6. Owner would have avoided everything if he had elected to purchase title insurance.

If you’re shopping for title insurance, Cortes and Hay have provided title insurance solutions to the greater New Jersey area for over 50 years. Contact us today if you have any questions, need a quote, or want title insurance for a New Jersey home you are about to purchase.