Title insurance is a form of insurance that serves to protect the property owner against unforeseen, potentially expensive problems related to the property’s title. “Title” in this instance simply refers to the true ownership of property. Property ownership can already carry with it enough stress, but the fear of some unforeseen title expense can really make it a terrifying prospect. Title insurance can help assuage those fears as you become a property owner.
Title insurance is not actually a legal requirement in Ontario, so the decision is one you should discuss with a lawyer you trust, like your Legal Sherpa® from Yeti Law. The benefits of coverage, especially when weighed against the cost of title insurance, usually make it an appealing option. In some cases, you may be required by a bank or lender to purchase title insurance if you are using a mortgage to finance the sale.
Title insurance isn’t a missed opportunity if you didn’t buy it at the time you purchased your property. You can purchase title insurance even for a home you already own.
What Does Title Insurance Cover?
Title insurance can be purchased for both residential and commercial properties, but for residential properties, there are two types of title insurance: Owner’s Policies, and Lender’s Policies. An owner’s policy (as the name implies) covers the home owner for as long as you own the property, and is priced based on the value of the property itself. A Lender’s Policy will protect the lender for the duration of your mortgage, and is priced based on the value of the mortgage.
Title Insurance covers a fairly extensive list of risks and liability, including:
- existing liens against the property
- surveying errors
- errors in public record
- property tax arrears
- other title-related issues that can prevent sale, rental, or mortgage of the property
What is Not Covered by Title Insurance?
It is important to note that title insurance will not cover every possible problem that you may encounter. It is not a home warranty, and shouldn’t be treated as such. Issues such as damages, disrepair, and theft won’t be covered. It also won’t cover any additions or renovations you happen to add to the home. You may also encounter:
- Native land claims
- environmental issues
- problems discovered in a new survey of the property
- zoning violations
Even though title insurance isn’t a catch-all, most real estate lawyers consider it more than worth the cost of purchase, as the coverage is still very broad and can prevent very expensive issues down the road. Modern privacy laws now make it much more difficult and expensive to research a property, so title insurance prevents unwelcome surprises that cannot easily be found via the research possible today.
Making a Title Insurance Claim
If you think you have grounds for a claim, contact your Legal Sherpa® immediately. Your Legal Sherpa® from Yeti Law can assist you in the filing of your claim, and help you to do so as soon as possible. If you have questions or concerns about coverage, your Legal Sherpa® can help you to determine if your Title insurance provides coverage for your claim.