August 21, 2023
Title insurance can protect you as a homeowner should there be challenges to the ownership of your home. It should be noted that it isn’t legally required for your home in Canada, but it’s another layer of protection.
Title fraud typically involves a fraudster using forged documents or stolen personal information to transfer your home’s title to himself without your knowledge. The fraudster uses the fake title to secure a mortgage on your home or and then disappears with the money.
This kind of insurance also helps protect you against what’s called unknown title defects that can prevent you from having clear ownership of your home.
1. What does ‘title’ mean?
When you buy a house, you receive the title, or legal ownership, to that property.
You obtain title to a property when the owner signs the deed (transfer document) over to you.
The title is filed in your province’s or territory’s land registration system and it shows who has “title” (legal ownership) of the property.
2. What does title insurance cover?
Title insurance may provide protection from:
3. What doesn’t title insurance include?
Title insurance typically doesn’t include:
4. Is title insurance part of my home or condo insurance?
Title insurance is not a substitute for home insurance and it isn’t included in home insurance. It’s also not a substitute for condo insurance.
Home insurance doesn’t protect you against title fraud.
Home insurance protects you from what might happen, such as theft, fire, unexpected accidents or injuries, certain types of weather-related events.
Title insurance protects you from things that may have already happened but are unknown or hidden, such as encroachment issues, unpaid taxes, and title fraud.
Commercial title insurance helps protect your business or commercial real estate investment from known and unknown title issues, such as building permit and zoning issues, tax arrears, and fraud. It can give you protection if your interest in the title is challenged.
5. Will my bank ask me to get title insurance?
When you are buying a home (or business), your mortgage lender may require you to purchase title insurance in order to get a mortgage to protect themselves.
6. How much does title insurance cost?
It’s a one-time cost, and it’s usually several hundred dollars. It’s usually based on the value of your property and your provider.
Once you buy title insurance, it’s valid for as long as you own the property.
7. Where do I get title insurance?
You can get it through an insurance broker or through your real estate lawyer/notary during the closing process.
One of the best ways to protect yourself against title fraud is to protect your personal information from identity thieves: