Do you have a title insurance policy on your home? With so many items to check off your to-do list when you buy a house or condominium, it can be hard to keep track of what real estate protection you actually have. If you’re unsure, read on to learn about how title insurance works in Canada, and if you need to update yours.
What is title insurance?
When you own a property, the legal term is a ‘title’. You officially obtain the title when you sign documents transferring the property from the original owner over to you—this is proof to the government that you now legally own the property.
Title insurance is a one-time fee specifically designed to protect you, the owner, from certain losses related to the property. These losses could include unknown defects and existing liens, such as the previous owner’s debt in regards to utilities, a mortgage, or property taxes.
How is title insurance different from home insurance?
While you pay for title insurance once, and you pay home insurance annually, it also won’t protect you from home maintenance issues such as flooding, fire, or theft.
Is title insurance mandatory in Canada?
You’re not required to have title insurance in Canada, or Ontario. It’s important to talk to your lawyer when purchasing a property in order to make an informed decision about title insurance—and should you choose to purchase it, it’s a good idea to have the policy in place for your closing date. However, you can purchase it after closing as well.
How do I know if I have title insurance?
There are two types of title insurance: lender and owner. A lender policy would have been set up as a condition of your mortgage and would protect the lender instead of you. But you may have also paid for owner’s title insurance, so check your closing documents or ask your lawyer.
When do I need to update my title insurance?
It’s important to know that if you refinance your mortgage with a different bank or lender, you may need to initiate a new title insurance policy.
“Even if you purchased title insurance when you bought your home, we encourage you to review your policy’s coverage limits to ensure they cover the current value of your property.” – Korman and Company
If you do need to update your policy you may be required to present an opinion of value showing the current value of your home. Our team is happy to help provide this for you, give us a call anytime.
Have more questions about protecting your home? We’re here to help. Reach out today.
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