What is Title Insurance and do I need it?

On behalf of Property Law Firm CB LLP on February 15, 2018.

Whether you’re thinking of purchasing a home soon, or already a homeowner, getting Title Insurance should be something to consider. Although Title Insurance is not required in Ontario, it will protect residential or commercial property owners and their lenders against losses related to the property’s title or ownership.

What is “Title”?

The word “Title” is a legal term that means you have legal ownership of property. You obtain title to property when the owner signs the deed over to you. Title is then registered in the government’s land registration system.

Title Insurance is something you discuss with your Lawyer, title insurance company or insurance agent/broker. Before making a final decision, it is very important to fully understand what type of protection title insurance can provide you. It’s important to note that Title insurance does not replace legal advice when purchasing a home.

What is covered?

Title Insurance can provide protection from losses such as:

• Unknown title defects (title issues that prevent you from having clear ownership of the property)
• Existing liens against the property’s title
• Encroachment issues
• Title fraud
• Errors in surveys and public records
• Other title related issues that can affect your ability to sell, mortgage, or lease your property in the future

Different types of Title Insurance

When researching Title Insurance, keep in mind the types of title insurance policies, and which would suit your needs best. There are two main policy types:

Owner’s policy: Owner’s policy protects the property owner from various title related losses that are listed in the insurance policy, for as long as the property is owned. An owner’s policy sets a maximum amount of coverage.

Lender’s policy: Lender’s policy protects the lender from losses in the event that the property’s mortgage is invalid or unenforceable. A lender’s policy usually provides coverage for the amount of the property’s mortgage.

Is Title Insurance for me?

There are many more factors to take into consideration when shopping for Title Insurance, such as the cost, the type of property you own and how long the coverage last. Most importantly, it is vital to inform yourself on the type of coverage you are looking for, and is Title Insurance covers it. Always do your research before you make a final decision. Title Insurance can offer great piece of mind when purchasing a new home, and can ensure no issues will arise if you decide to sell the property later down the road.