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Insurance Types: Mini Series Part 4

Updated: Mar 21

What is title insurance?

It is an insurance policy that protects residential or commercial property owners and their lenders against losses related to the property’s title or ownership. It can also simplify the closing process for your lawyer, thereby saving you time and money.

What is title?

The word “title” is a legal term that means you have legal ownership of property. You obtain title to a property when the owner signs the deed (transfer document) over to you. All property title information is available on the government-run Land Registration system.

What does title insurance cover?

For a one-time fee, called a premium, a title insurance policy may provide protection from such losses as:

  • Unknown title defects that impact your ownership of the property

  • Existing liens against the property’s title, such as unpaid debts secured against the property by a previous owner, including:

  • Utility bills

  • Mortgages

  • Property taxes

  • Condominium charges

  • Encroachment issues (e.g. a structure on your property that encroaches on your neighbour’s property)

  • Errors in surveys and public records

  • Other title-related issues that may affect your ability to sell, mortgage, or lease your property in the future

  • Title fraud

What are the different types of title insurance?

There are two main types of title insurance policies:

Owner’s Policy: Protects you from various title-related losses listed in the insurance policy. An owner’s policy sets a maximum amount of coverage.

Lender’s Policy: Protects the lender from losses in the event that the property’s mortgage is invalid or unenforceable. A lender’s policy usually provides coverage for the amount of the property’s mortgage.

You can purchase title insurance for both residential and commercial properties.

Contact a professional or reach out for a referral.

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