Title insurance: What every home owner needs to know

You combed through websites, apps, maybe even the papers and visited dozens of places until finally! You found the perfect house! Your biggest achievement, your biggest asset – how do you keep it safe? Or like in this case, how can you even make sure that it’s all yours?

Before you purchased your home, the property may have changed hands several times, leaving room for mistakes like an incorrect survey, a non-existent permit or title-related issues. Even with a new build, somewhere along the way, there may have been an error that could affect your ability to sell, mortgage, or lease your property in the future. These are the types of things that a title insurance policy can protect you against.

What exactly is title insurance?

Title insurance is a unique form of insurance. Unlike home insurance where you are insuring the structure and contents, title insurance protects you, the home owner, against losses related to the title (ownership) and other defects relating to your property. Plus, it may cover fixing issues or legally defending your ownership, which can be very costly and stressful.

Do you automatically get a title insurance policy when you purchase property?

It’s a common misconception that home owners automatically get a residential title insurance policy when buying property. While a lender policy is required on every purchase, a home owner policy is not. It’s up to you to make sure that you have the protection available to you through title insurance.

Does the lender or loan policy cover you?

No, a lender aka loan policy covers lenders only, and protects their interests when it comes to priority and enforceability of your mortgage, title and survey defects, municipal issues, and title fraud.

What does a home owner title insurance policy cover?

A typical title insurance policy covers common issues that may have happened both before and after you’ve purchased your home. This is sometimes referred to as pre- and post-policy because the day you take ownership of your home is generally also the effective date of the policy.

The main areas of coverage in the home owner policy are:

• Fraud — a person fraudulently transfers your property without your knowledge or consent.
• Forgery — someone forges your signature on a registered document, which allows them to sell or mortgage your property.
• Encroachments — if a structure built by a previous owner sits outside the property’s boundaries or if a neighbour builds a structure that is partially on your property after you purchase your policy.
• Lack of building permits — if a previous owner completed work to your property without the required building permits, you could be forced by your municipality to remove or fix the structure.
• Duty to defend — if you have to protect and restore your title as a result of a covered title risk, FCT will pay for the legal fees and costs associated with it.

How much does a policy cost?

• For a low one-time premium, you can ensure that you have the protection you need for as long as you own your home. Your lawyer can provide you with a quote within minutes.

Don’t put yourself at risk. For a free quote, visit fct.ca today!

By Sylvia Hoyt

Regional Vice President Atlantic Canada & Northeastern Ontario

This is provided as general information only. For further details regarding coverage, please review your policy.

Also, feel free to contact us!