Title insurance protects against issues with property ownership that could affect your rights. While it may seem like just another closing cost, it provides valuable protection for both you and your lender. Here's everything you need to know.
What Is Title Insurance?
Title insurance protects against losses from problems with the legal title to your property—issues that existed before you bought but weren't discovered.
Key difference from other insurance:
- One-time premium (not ongoing)
- Covers past issues, not future events
- Protection lasts as long as you own the property
What Title Insurance Covers
Common Title Defects
| Issue | What It Means |
|---|---|
| Title fraud/forgery | Someone fraudulently sold property they didn't own |
| Unknown liens | Previous owner's debts registered against property |
| Survey errors | Boundaries different than represented |
| Encroachments | Structures crossing property lines |
| Unpaid taxes | Previous owner's tax arrears |
| Invalid mortgages | Prior mortgages not properly discharged |
| Zoning violations | Previous owner violated bylaws |
| Missing heirs | Estate issues from previous owners |
Real-World Example
You buy a home. Years later, the neighbour claims your fence is on their property. Surveying confirms they're right—the previous owner built 3 feet over the line.
Without title insurance: You may need to move the fence at your cost, potentially lose that land.
With title insurance: The insurer either settles with the neighbour or covers your legal costs and losses.
Protect Your Investment
Get pre-approved and learn about all closing requirements, including title insurance options.
Types of Title Insurance
Lender's Policy
Purpose: Protects the lender's interest in the property
Coverage: Amount of the mortgage
Required? Usually yes—most lenders require it
Who pays: You (the borrower)
Owner's Policy
Purpose: Protects YOUR interest in the property
Coverage: Full property value
Required? No—but highly recommended
Who pays: You (optional purchase)
Cost of Title Insurance
One-time payment at closing—no annual premiums.
Value perspective: For $400-$600, you get protection worth potentially hundreds of thousands. One of the best insurance values in real estate.
Title Insurance vs. Traditional Survey
Traditional Approach
- Order full property survey ($500-$1,500+)
- Surveyor physically measures property
- Identifies boundaries, easements, encroachments
- Takes 1-3 weeks
Title Insurance Approach
- Lower cost than survey
- Faster closing
- Covers survey-related issues IF they arise
- Doesn't proactively identify issues
Which Is Better?
| Scenario | Recommendation |
|---|---|
| Rural property | Survey recommended |
| Older property with unclear boundaries | Survey recommended |
| Standard urban property | Title insurance typically sufficient |
| Tight closing timeline | Title insurance faster |
| Lender requires survey | Must get survey |
What Title Insurance Doesn't Cover
- Issues you knew about before purchase
- Environmental contamination
- Property condition problems (roof, foundation, etc.)
- Issues arising after you purchase
- Native land claims (in some policies)
- Matters you agreed to accept
FAQ
Q: Is title insurance a one-time payment?
A: Yes—you pay once at closing, and coverage lasts as long as you own the property (for owner's coverage) or until the mortgage is paid off (for lender's coverage).
Q: Do I need both lender's and owner's coverage?
A: Lender's coverage is typically required by your mortgage lender. Owner's coverage is optional but strongly recommended—it's inexpensive and protects YOUR interest.
Q: Can I choose my title insurance provider?
A: Usually your lawyer handles this, but you can ask about options. Major providers include FCT, Stewart, and Chicago Title.
Q: What if I find out about a title problem years after buying?
A: As long as the issue existed before you purchased, you're covered (subject to policy terms). Contact your title insurer to file a claim.
Q: Do I need title insurance for a refinance?
A: New lender's coverage is typically required. Your existing owner's coverage (if you have it) continues.
What's Next
Title insurance is just one of several closing requirements. Get pre-approved with our team and we'll walk you through everything you need to close smoothly.
Understand All Closing Requirements
Our team will guide you through every closing cost and requirement, including title insurance.
