As you might expect, buying a home is one of the biggest financial commitments you will make in your life. And buying a home often involves title insurance. This type of insurance can protect you as a buyer and as its current owner. 

 

In this article, we will define what title insurance is and give you an overview of the risks covered by it. Finally, we will help you assess whether you really need this type of insurance or not. 

 

 

Primarily, title insurance protects against losses related to a real estate title situation. This insurance is available for both commercial and residential properties, for both purchase and refinance transactions.

 

However, title insurance can also become an insurance policy in which the objective is to compensate the insured for damages up to the amount of the insurance coverage.

 

Of the most common types of title insurance, the one that a homeowner can purchase at the time of buying a property is certainly the most common. This insurance provides protection approximating the market value of a property at the time it was purchased by the owner. 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 is a list of problematic situations in which title insurance could be especially useful:

 

 

Title insurance also covers legal fees and other costs associated with a claim to clarify title. The reimbursement of these charges is in addition to the amount of the benefit that the insurer agrees to pay when there is a covered risk that cannot be corrected in any other way. 

 

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

 

Title insurance can be taken out at any time, although it is more common when buying a property or renewing a mortgage. Be aware that title insurance remains in effect as long as you own the property, and if the insurance protects the lender, it remains in effect as long as you have a mortgage with them.

 

 

Title insurance is not a requirement across Canada. However, it is strongly recommended that you protect yourself as an existing buyer or owner. To make the right decision, we recommend that you discuss the benefits of acquiring title insurance with your notary, mortgage professional or insurance broker. 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 itself to do so.

 

Rest assured that Mortgage Planners advisors are able to direct you to qualified professionals who will be able to advise you on the purchase of title insurance.