As you might expect, buying a property is one of the most significant financial commitments you will make in your lifetime. And buying a house often involves title insurance. This type of insurance can protect you as a buyer and current owner.

 

In this article, we will define what title insurance is, and we will also cover the risks it protects against. Finally, we will help you evaluate whether you really need this type of insurance.

 

First and foremost, title insurance protects against losses related to a problem with the property title. This insurance is available for commercial and residential properties, both for purchase transactions and refinancing.

 

Title insurance can also become insurance aimed at compensating the insured who suffers damages up to the coverage amount.

 

Among the most common title insurances, the one a homeowner can obtain at the time of purchasing a property is certainly the most usual. This insurance offers protection comparable to the market value of a property at the time the owner bought it. It is important to note that title insurance for homeowners is not mandatory.

 

As explained in the previous section, title insurance can also cover other situations that may affect the right to use and occupy a property and potentially cause financial losses.

 

Below, we invite you to review the list of problematic situations in which title insurance could be very useful:

And in the event of damage covered by title insurance, the insured usually does not have to pay a deductible.

 

Imagine you buy a house and, a few months after the purchase, an individual claims to be the legitimate heir of the property and wants to claim possession. Without title insurance, you could face high legal fees to defend your property rights. However, with title insurance, you are protected against this type of claim. The insurer will cover the necessary legal fees to defend your property title and, if necessary, compensate you for the losses incurred.

 

Suppose you have installed a shed in your garden. A few months later, you receive a notification from the municipality stating that your shed encroaches on the neighboring property and does not comply with local zoning regulations. Without title insurance, you would be responsible for the costs of moving the shed and any potential fines. However, with title insurance, you are protected against this type of problem. The insurer will cover the costs of moving the shed to comply with municipal regulations, as well as the associated legal fees.

 

Title insurance can be purchased at any time, although it is more common when buying a property or during mortgage renewal. Title insurance remains in effect as long as you are the owner, and if the insurance protects the lender, it remains in effect as long as you have a mortgage with them.

 

Title insurance is not mandatory throughout Canada. However, it is strongly recommended to protect yourself as a buyer or existing owner. To make a good decision, we advise you to discuss it with your notary, mortgage advisor, or insurance broker to fully understand the benefits of acquiring title insurance. Once you have all the information, you will be able to make an informed decision based on your specific needs.

 

Damage insurance brokers are the only representatives authorized to sell you title insurance. However, a notary or even a lawyer can represent you with insurers if you mandate them and if they are not paid by the insurer to do so.

 

Rest assured that at Planiprêt, our advisors can guide you to qualified professionals who will be able to advise you well on acquiring title insurance.