Title insurance is becoming increasingly popular among Canadian homebuyers—but what exactly is it, and do you really need it? Whether or not title insurance is right for you depends on your unique transaction and should always be discussed with your lawyer. This guide will give you a strong foundation so you can make an informed decision with confidence.
What Is “Title” in Real Estate?
The term title refers to the legal ownership of a property. When you buy a home, you want what’s called “good and marketable” title—meaning you have the clear legal right to own and sell the property. Before closing, your lawyer or legal representative will conduct a title search through public records to uncover any existing issues tied to the property, such as:
- Outstanding mortgages or liens
- Unpaid property taxes or utility bills
- Easements or rights-of-way registered on title
These issues are typically resolved before closing. However, sometimes hidden defects—like fraud, survey errors, or zoning violations—don’t surface until after you’ve taken ownership. In such cases, title insurance can offer critical protection.
What Does Title Insurance Cover?
Title insurance protects homeowners and/or mortgage lenders against financial loss resulting from issues tied to the property’s title. Depending on the policy, it may cover:
- Survey or boundary irregularities
- Fraud or forgery in the property’s history
- Encroachments (e.g., structures built too close to the property line)
- Zoning violations and bylaw issues
- Unregistered easements or rights-of-way
- Lack of legal access to the property
It’s important to note that certain exclusions—such as Indigenous land claims or environmental hazards—are common. Your lawyer can review your policy to explain what’s included and what’s not.
Who Does Title Insurance Protect?
Title insurance can be issued for the purchaser, the lender, or both. In many cases, mortgage lenders require it as a condition of the loan. For buyers, it offers peace of mind by covering legal costs and compensation if a covered issue arises.
Key points to know:
- Purchaser policies are based on the home’s purchase price
- Some include inflation protection, adjusting coverage if the home’s value increases
- Coverage can extend to certain family members or beneficiaries
How Long Does Title Insurance Last?
For homeowners, title insurance coverage typically lasts as long as you own the property. Some policies also extend coverage to your spouse or children if the home is transferred for nominal consideration (e.g., as part of estate planning).
For lenders, coverage remains in effect for the duration of the mortgage. If the lender has to foreclose or take legal action, the policy can help recover losses associated with title-related defects.
How Much Does Title Insurance Cost?
The premium for title insurance is paid once, at the time of purchase. It’s a one-time cost—not a recurring fee. In most cases, the buyer pays the premium, although some situations may involve the seller covering it. Pricing varies depending on property value and the provider, but generally ranges from a few hundred to a thousand dollars.
Some policies automatically cover both the buyer and lender, while others charge a small additional fee to include both parties.
Why Title Insurance Offers Peace of Mind
Title insurance can help prevent closing delays due to last-minute title issues. More importantly, it provides reassurance after closing by covering legal fees and losses related to a covered claim. If something goes wrong with your title—even years after you buy—the policy can offer financial protection and legal support when you need it most.
Should You Get Title Insurance?
While not mandatory for buyers, title insurance is highly recommended by many legal and real estate professionals in Canada. The best way to determine whether it’s right for your transaction is to consult your lawyer. They’ll help you evaluate your risk, explain the policy options, and ensure you’re protected based on the specifics of your purchase.