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What’s the difference between a regular title insurance policy vs. enhanced?

A Title insurance policy is very important when buying a home. If you’re looking at all the beautiful Maine real estate and considering making the state your home – or the location of your vacation home – you’ll want to make sure your interests are protected. Additionally, the lender that gives you the mortgage on your home will also want protection, in the form of a title insurance policy. All polices are not created equally, though, and you will need to decide between a regular title insurance policy and an enhanced policy, depending on your specific needs.

A regular title insurance policy is the most commonly purchased kind. It covers third-party claims for interest in your title, like liens and judgments. For the majority of people, that’s enough. If there aren’t any tax liens, mechanic’s liens, HOA charges, or special assessments that can be claimed against your title, you’re essentially in the clear – or at least that’s the assumption most people make. Unfortunately, that’s not always the case. In order to truly be protected, an enhanced title insurance policy is the better choice, as it covers much more than a regular policy.

By getting an enhanced title insurance policy for your Maine home, you can also be covered for encroachment, violations of zoning ordinances, violations in the use of land, building permit violations, unrecorded leases, and a number of post-policy issues that can appear, along with covenants, boundary walls, fence easements, and access to and from the property. In the vast majority of real estate deals in Maine, there are no problems with any of these things. However, the one time that a problem does arise, it would be highly beneficial for the title policy to protect your interests. If you don’t have coverage, these issues can quickly become very expensive.

There’s even a risk of losing your home if you’re not covered for some of these very serious problems, so you’ll have peace of mind if you choose an enhanced title insurance policy. Of course, with more coverage comes a higher-priced policy, as well. Because it costs more to buy an enhanced policy as opposed to a regular one, it’s important to weigh your options and choices. While an enhanced policy definitely offers a much higher level of protection, it also covers you for a number of problems that are very unlikely. With that in mind, you may not feel an enhanced policy on your new Maine home is worth the extra cost.

Unless your lender is insistent about an enhanced policy, it will be up to you what you choose. If you’re uncertain as to which option would be the best for you, consulting with your real estate agent, the title company, or even a real estate attorney can give you the knowledge you’re looking for when determining which policy you want to choose. Then you’ll have what you need to consider both policies carefully and select the one that’s going to provide you with coverage and also meet your budget requirements.