Title Insurance Details

What is title insurance?

Title insurance is a type of insurance that protects homeowners and lenders against certain losses related to the ownership or title of a property.

Before you purchase a home, your lawyer searches the property's title and public records to identify issues such as existing liens, unpaid property taxes, ownership problems, encroachments or other registered interests. However, some title-related problems may not be discovered before closing.

Title insurance can provide coverage for certain risks, which may include unknown title defects, existing liens, errors in public records, certain encroachment issues and title fraud. Depending on the policy, it can also cover certain legal expenses associated with defending your title.

For example, a previously unknown lien or an issue affecting your legal ownership could potentially result in significant costs. Title insurance may protect you against covered losses arising from these types of problems.

Important: Title insurance does not cover everything. Policies contain exclusions, and issues such as certain zoning or building bylaw violations, known defects and some problems discovered through a new survey or inspection may not be covered. Always review the specific policy with your lawyer or title insurer.

Title insurance is not mandatory in Ontario, but many buyers choose to purchase it as part of their closing process.

Am I required to buy it?

Title insurance is not legally required in Ontario, even if you have a mortgage. However, many mortgage lenders require title insurance as a condition of financing.

A title insurance policy may protect both you and your lender against certain covered title-related risks. The lender's coverage generally protects its financial interest in the property, while an owner's policy can protect you as the homeowner.

Title insurance is typically purchased with a single, one-time premium paid at closing, rather than as an ongoing monthly expense. Coverage generally continues for as long as you own the property, subject to the terms and conditions of the policy.

Your lawyer can explain whether your lender requires title insurance and what protection is included in the policy you are being offered.

Who is protected?

Title insurance can protect the homeowner, the lender, or both, depending on the policy. Coverage may include certain title defects, liens, encroachments, fraud or forgery, and errors in public records.

Not everything is covered. Exclusions can include known defects, environmental issues, and certain zoning or building-bylaw violations. Coverage varies by policy, so review the details with your lawyer.

When does coverage end?

For an owner's policy, coverage generally lasts as long as you own the property, subject to the policy's terms. Some policies may extend coverage to certain heirs or family members who receive the property.

For a lender's policy, coverage generally lasts as long as the mortgage remains secured against the property, subject to the policy terms.