Bulletin: NJ000013

Dear Associates:

There has been, for some time, some confusion as to the proper use of the Arbitration Endorsement. The extent of this confusion became apparent at a recent meeting of the New Jersey Land Title Insurance Rating Bureau wherein the matter was discussed and there appeared to be several opinions as to its proper use among the various underwriters. In response to the questions raised at the meeting the Manager of the Bureau, Joseph M. Clayton, Jr., Esq., reviewed the records of the filing with the department relative to the endorsement and concluded that at the time the 1987 policies were approved by the New Jersey Department of Insurance (which was the first time the arbitration clause was introduced into the policy) the Department approved the policies upon the expectation that all underwriters would make the arbitration endorsement available upon request at no charge. Consequently, you are not obligated to issue this endorsement with every policy. If requested, however, the endorsement should be issued at no charge.

The 1992 forms of Owner and Loan policies and 1987 Residential Owner's policy all have an arbitration provision. The provisions are essentially the same in that they permit either the insurer OR the insured to request any dispute between them be submitted to binding arbitration. The arbitration endorsement required by the Department of Insurance provides that matters may only be submitted to binding arbitration when BOTH the insurer and insured agree to send the matter to binding arbitration.

If you have any questions in regards to the use of this endorsement please do not hesitate to call our office.