A Flood of Misinformation: Title Insurance is Not a Home Warranty
What exactly is the purpose of a title insurance? To protect your ownership, a title insurance policy provides coverage in the event that your right of ownership is challenged or a loss occurs due to a covered title defect or a claim against your property.
There’s a lot of confusion about title insurance. Some people call title insurance the “surprise” insurance because they assume it covers any surprises with the property they’re buying. It’s only when there’s a problem that homeowners actually check what their policy covers. By then, it’s too late.
What does title insurance cover? Does it cover structure, hidden things in the basement, leaks? How many homeowners ask these questions before buying any insurance related to their home? Not enough, I can tell you that much.
Most people buy title insurance when they purchase a home. But it’s not required in Canada. It’s meant to protect homeowners from such perils as title fraud, encroachments from neighboring properties—anything that can challenge the ownership of your home, or anything related to the title of your home. I also covers losses related to the title or ownership of the property. But it’s not a home warranty or home insurance policy.
(Citied from the National Post, published December 10 2012, written by Mike Holmes.)
Top Benefits of Title Insurance
- Fast and efficient closing process – title insurance will help ensure your transaction closes on time Survey coverage – protects against unmarketability (not being able to sell your property in the future or obtain financing against your home) as a result of defects that would have been disclosed on an up to date survey, Real Property Report or Location Certificate
- Fraud and forgery – protection against fraudulently registered mortgages against your title
- Duty to defend – the legal fees associated with resolving insured title issues will be covered
- Building permit coverage – coverage for renovations completed without a permit that result in a loss
- Zoning coverage – protection should a property not meet municipal zoning requirements
- Competing interests – protection in the case of someone claiming an interest in your land; for example, an easement for a driveway or a builder’s lien
- Problem solving/facilitates closings – we can frequently provide coverage for known defects such as encroachments, delays in registration and zoning violations
- Saving money – requesting a homeowner title insurance policy at the time of your real estate purchase may be the best opportunity for you to buy your policy at a lower price. If your lawyer/notary is ordering a policy for your lender, you can buy a homeowner policy at a lower cost!
For more information on how you can include title insurance as part of the purchase of your home, ask your lawyer or notary about homeowner’s title insurance coverage and enjoy the peace of mind that results from the protection of a title insurance policy.