Everything You Need to Know About Title Insurance

 

In recent years, title insurance has become a crucial aspect of the home buying process in Canada. This article aims to help you understand the concept of title insurance, its benefits, and why you should consider it when purchasing a property. Let's dive in and unravel the mysteries of title insurance!

 

What is Title Insurance?

Title insurance is a specialized form of insurance that protects property owners and lenders against issues related to the property's title or ownership. In simple terms, it's an insurance policy that covers potential financial losses resulting from defects in a property's title. These defects can include fraud, undisclosed liens, encroachments, or other issues that may affect the ownership or use of the property.

 

Why Do You Need Title Insurance in Ontario?

Title insurance is not mandatory in Ontario, but it has become increasingly popular for a few key reasons:

 

Protection against title defects: Title insurance covers a wide range of potential issues, including forgery, fraud, undisclosed heirs, and registration errors. These issues can lead to financial loss and disputes over ownership, which can be costly and time-consuming to resolve.

Coverage for survey issues: In some cases, an updated survey of the property may reveal encroachments, easements, or other issues that affect the property's use or value. Title insurance can help protect you against these unforeseen complications.

Legal assistance: If a title issue arises, your title insurance policy can cover the costs of legal representation and associated expenses, saving you thousands of dollars in the process.

Lender requirements: Many mortgage lenders in Ontario require borrowers to purchase title insurance to protect their investment in the property.

 

How Does Title Insurance Work?

When you purchase a title insurance policy, the insurer conducts a thorough search of public records to identify any potential issues with the property's title. This process, known as a title search, includes reviewing land registration records, tax records, court documents, and other relevant sources.

 

Once the title search is complete, the insurer will issue a title insurance policy that outlines the coverage provided. The policy will typically include coverage for known risks and undisclosed risks, as well as any exceptions or exclusions that may apply.

 

If a covered title issue arises after you've purchased the property, your title insurance policy will provide financial protection and legal assistance to help you resolve the problem.

 

How Much Does Title Insurance Cost in Sarnia-Lambton?

Title insurance premiums in Sarnia-Lambton, and throughout Ontario, are generally based on the property's purchase price. For a residential property, you can expect to pay a one-time premium ranging from $200 to $400 or more, depending on the property's value and the insurer. 

 

Keep in mind that this is a one-time fee paid at the time of purchase, and the policy remains in effect for as long as you own the property.

 

Choosing the Right Title Insurance Provider

When selecting a title insurance provider in Ontario, it's essential to consider factors such as reputation, coverage options, and customer service. Research and compare providers to ensure you're getting the best protection for your investment.

 

Some popular title insurance providers in Ontario include:

• First Canadian Title (FCT)
• Stewart Title Guaranty Company
• Chicago Title Insurance Company

 

Don't hesitate to ask your real estate agent, lawyer, or mortgage broker for recommendations based on their experience.

 

Frequently Asked Questions About Title Insurance

To help you further understand title insurance, here are some frequently asked questions and their answers:

 

Is title insurance required for refinancing?

While title insurance is not a legal requirement for refinancing in Ontario, some lenders may require it to protect their investment. It's essential to check with your lender to determine their specific requirements.

 

Does title insurance cover future issues?

Title insurance generally covers issues that existed before the policy's effective date. However, some policies may offer limited coverage for specific future events, such as fraud or forgery. It's essential to review your policy's terms and conditions to understand the extent of coverage provided.

 

Can I transfer my title insurance policy when I sell my property?

Title insurance policies are generally non-transferable. When you sell your property, the new owner would need to purchase their own policy to ensure protection against potential title issues.

 

What happens if I discover a title issue after purchasing title insurance?

If you discover a covered title issue after purchasing your policy, you should contact your title insurance provider immediately. They will help guide you through the process of resolving the issue, which may include covering legal fees, compensating for financial losses, or taking other steps to protect your interests.