Title insurance

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Title insurance –
Do you have it, do you need it?

Your property's title provides the legal proof that you are the owner. Given the negative impact that any potential errors or misrepresentations on your title can have on your property's value, buying a little insurance protection should be considered.

What am I insuring?

Title insurance is not mandatory but it is routinely recommended by lawyers, lenders and realtors because it protects you from potential losses against fraud, survey errors, encroachment issues and existing undisclosed liens. Some policies also include a rider for "building compliance" coverage, which means that if you buy a property that was renovated without proper permits, and if the changes were not in compliance with current building code regulations, the title insurer will compensate you for all or part of the cost of correcting any issues.

A title insurance premium is a one-time fee and the coverage lasts for as long as you own the property. Many policies also allow the amount of coverage to appreciate along with the value of the property, up to a maximum of double the original purchase price.

Can you buy insurance for a property you currently own?

Yes, you can, however the rules are slightly different because any pre-existing conditions cannot be as easily determined. However many existing homeowners have still decided to purchase a policy to protect against mortgage fraud. This can happen when fraudsters steal personal information and forge documents to transfer title of the property.

Are there other advantages to title insurance?

In some cases title insurance can eliminate the need for a new, up-to-date land survey but it does not replace the role of a lawyer in a real estate transaction.  It is an added layer of protection that can settle claims for losses that would otherwise require you to file a lawsuit.  If this extra protection appeals to you, title insurance is offered by several companies and can be purchased through your lawyer, a title insurance company or an insurance agent/broker.

What does title insurance cost?

The cost of title insurance varies depending on the scope of coverage, the type of property and its value.  One firm advertises rates ranging from $185, for a condo under $200,000 purchased directly from a developer, to $374 for a home valued at up to $500,000.

Need to know more?

The Government of Ontario has this handy website:
http://www.fsco.gov.on.ca/en/insurance/brochures/Documents/undstitins.pdf

For information on coverage that's best for you, speak with your lawyer, your realtor, and/or your Mortgage broker.
  
If you are unsure about whether or not you already have title insurance check the package of documents you received from your lawyer. You can also contact your lawyer or realtor directly and ask them.