Title Insurance – Do you need it?

We asked Brittany Albert of local trusted title company Treworgy & Baldacci,
about title insurance. What it is, who needs it and why? We hope this helps our clients make an educated decision when thinking about buying title insurance for their home.

What exactly is title insurance and why is it needed?

“There are two types of title insurance. Lender’s title insurance and owner’s title
insurance. Lender’s title insurance is mandatory where owner’s title insurance is
optional yet highly recommended. Lender’s title insurance protects the lender
where owner’s title insurance protects the buyer.”

What can happen if a homeowner does not purchase title insurance?

“Unfortunately, there are sometimes unrecorded liens and encroachments that are
found after closing. If an owner does not have owner’s title insurance, some of
these issues can be incredibly costly, especially because you will most likely need
to get an attorney involved. Owner’s title insurance is a one-time fee that protects
you through the entirety of ownership.”

Can title insurance be purchased after a home is purchased?

“It can be purchased after closing. However, if you purchase owner’s title
insurance at closing it’s at a discounted rate. That rate is typically honored within
30 days of closing and then after that you have to purchase it at full price.”

Where do homeowner’s buy title insurance?

“Buyers can purchase it right through us at closing! That is typically the easiest way
to buy the title insurance.”

Is title insurance expensive?

“Owner’s title insurance is based off the purchase price of the property. So, the
higher the priced home, the more expensive it would be. It is a one-time fee,
though. You don’t have to continuously pay yearly for it.”

What can happen if you don’t purchase owner’s title insurance?

“Most title issues occur from liens on the property. A scary example is that a title
company didn’t catch a mortgage on the property when it was sold previously.
When the new owner went to sell the property, they found the first mortgage which
is required to be paid off along with their second mortgage. If they had owner’s
title insurance they could reach out to the insurance company and had the first
mortgage paid for by the owner’s title insurance. Otherwise, they would have to
have attorneys involved on their own dime.”

Want to learn more about title insurance?

Contact Brittany!



25 Spring Street, Suite A

Scarborough, ME 04074