Title Insurance Details

What is title insurance?

Title insurance protects against loss from problems connected to your property's title. Before you bought, the home and land may have changed hands many times — and a weak link anywhere in that chain (a forged signature, unpaid taxes or liens) could later cause trouble. Title insurance covers the insured party for claims and legal fees arising from such problems.

Before closing, public records are searched to confirm prior ownership and dealings, and issues are typically cleared up. Occasionally defects aren't discovered or remedied before closing and can be costly later — for example, an unpermitted addition that must be removed.

Am I required to buy it?

Title insurance is required if you need a mortgage, because lenders require protection equal to the loan; it lasts until the loan is repaid. Like mortgage insurance, it protects the lender but you pay the premium — a single up-front payment.

Who is protected?

Policies can favour the purchaser, the lender, or both. Commonly covered risks include survey irregularities, forced removal of structures, fraud/forgery/duress, unregistered easements and rights-of-way, lack of access, work orders, and zoning or set-back deficiencies.

A risk usually must have existed as of the policy date. Some risks — such as native land claims and environmental hazards — are normally excluded, so discuss coverage with your lawyer.

When does coverage end?

When covering the purchaser, coverage lasts as long as you hold title (some policies extend to heirs or family who receive title). When covering the lender, it lasts as long as the mortgage remains on title, up to the principal amount.

Protection and peace of mind

Title insurance can prevent closing delays due to title defects and, if a covered issue arises, pays the legal fees and expenses to defend your title and covers the loss.