Recently, the headlines have been filled with seemingly unbelievable tales of identity theft, fraud and stealing homes. It’s important to protect yourself and your home from real estate fraud.
Do you have title insurance? With so many items to check off your to-do list when you buy a house or condo, this is one item you will want to consider carefully. Let us answer some common questions about title insurance and explain how it can help protect you from real estate fraud.
What is title insurance?
Ownership of a property is legally referred to as a “title”. Title insurance is an insurance policy that covers residential or commercial property owners and lenders against losses related to the property’s ownership.
How is title insurance different from home insurance?
Title insurance is a one-time payment covering you for the entire time you own the property, whereas home insurance is renewed annually. Title insurance covers the “title” related to property ownership and it protects you from real estate fraud and issues related to real estate transactions. In contrast, home insurance protects you in case of property damage such as in the case of a fire or a flood.
Do I really need title insurance?
Title insurance is not a requirement in Ontario. You will be offered the chance to purchase title insurance by your lawyer when you complete or close your purchase. You can also purchase title insurance at a later date.
How much does title insurance cost in Ontario?
When you purchase title insurance, you will pay a one-time fee upfront, through your lawyer. In Ontario, it will typically cost between $200-$500 and is often purchased when you buy a property or home. The one-time premium will cover the insured property for as long as you own it. This insurance is still valid if you pass on the home to your spouse, child(ren) or heir/s.
How do I know if I have title insurance?
There are two types of title insurance: lender and owner. A lender policy is set up as a condition of a mortgage and it protects the lender, not the owner. You may have already paid for title insurance, so check your closing documents or ask your lawyer to confirm this.
If you don’t have a lawyer, give us a call and we can offer you some options.
Why check your policy now?
Many of us purchased title insurance when we bought our house. For some of us, that was many years ago. If the value of your home has increased since you purchased it, then it’s time to review your title insurance.
The amount of coverage offered on policies can vary. Some title insurance policies cover the purchase price. Often, policies will cover two or four times the purchase price. It’s worth inquiring to make sure you have enough coverage. If your policy does need to be updated, you may be required to present an Opinion of Value to insure the new value. Contact us today and our team can provide you with a complimentary opinion of value, no strings attached.
Also, double-check that your title insurance policy names you as the beneficiary, not the bank. Often, when a mortgage is being placed on the property, it is the lender who holds the title.
When do I need to update my title insurance?
It’s important to know that if you refinance your mortgage with a different bank or lender, you may need to initiate a new title insurance policy.
