First of all, …..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 (transfer document) over to you. Title is then registered in the government’s land registration system.

What is Title Insurance?

Title insurance is an insurance policy that protects residential or commercial property owners and their lenders against losses related to the property’s title or ownership.

Do I Really Need Title Insurance?

Title insurance is not a requirement in Ontario. The decision whether or not you should purchase title insurance should be discussed with your lawyer, title insurance company or insurance agent/broker, to fully understand what type of protection title insurance can provide you, and to determine if other options exist. Once you get all the facts, you can make an informed decision based on your specific situation and needs. It is important to keep in mind that title insurance does not replace legal advice when purchasing property.

What Does Title Insurance Cover?

For a one-time fee, called a premium, a title insurance policy may provide protection from such losses as:

-Unknown title defects (title issues that prevent you from having clear ownership of the property);

-Existing liens against the property’s title (e.g. the previous owner had unpaid debts from utilities, mortgages, property taxes or condominium charges secured against the property);

-Encroachment issues (e.g. a structure on your property needs to be removed because it is on your neighbour’s property);

-Title fraud;

-Errors in surveys and public records; and

  -Other title¬related issues that can affect your ability to sell, mortgage, or lease your property in the future. Your title insurance policy will protect you as long as you own your property, and will cover losses up to the maximum coverage set out in the policy. It may also cover most legal expenses related to restoring your property’s title.

When is residential title insurance normally purchased?

Residential title insurance is usually purchased when you buy your home. However, you can also purchase residential title insurance anytime after you purchase your home.

Note ¬ Title insurance policies for existing homeowners are slightly different than policies that are obtained at the time a property is purchased.

How much does it cost?

The cost of residential title insurance varies based on the value of your property, and the insurance company you choose. You will need to pay a one-time fee, called a premium.

How long does the coverage last?

Residential title insurance coverage lasts as long as you own the property. Most residential title insurance policies extend coverage to your heirs through a will, to a spouse in the event of a divorce, or to children when the property is transferred from parents to children for nominal consideration.  

Where can it be purchased?

You can purchase residential title insurance through your lawyer or title insurance company, or you can contact an insurance agent/broker.

For a list of insurance companies who are licensed to sell title insurance in Ontario, visit the Financial Services Commission of Ontario’s (FSCO) website at www.fsco.gov.on.ca, click on Licensing & Registration, and select Licensed Insurance Companies in Ontario.