13 Feb What is Title Insurance?
With heightened attention on title fraud lately, understanding the benefits and coverages of title insurance can help protect your most valuable asset – your home.
Title insurance can protect against many losses that result from undetected or unknown title defects.
Some Key Coverages include:
- Someone else owning an interest in the insured’s title
- Existing liens against the title
- Real property tax arrears for the period prior to your purchase of your home
- You are forced by a governmental authority (or in the case of encroachments by the affected neighbour) to remove or remedy your existing structure(s), or any portion thereof, other than a boundary wall or fence*, because of:
- Violations of municipal zoning by-laws
- Setback violations
- Encroachments onto adjoining land
- Outstanding municipal utility charges, provided such charges form a lien on title
- Existing work orders
- Lack of legal access to the property
- Unmarketability of the land due to adverse matters that would have been revealed by an up-to-date survey/real property report/building location certificate
- Forgery or impersonation which results in someone else claiming to own an interest in or have a lien on your title
Policies can be issued for residential dwellings of up to six units, condominiums, residential vacant land, cottages, leased land and even to existing homeowners who did not obtain title insurance at the time they purchased their property.
Coverage for the owner is valid for the entire time the insured has an interest in the title to their home. It’s available for a one-time premium payable at the time the real estate transaction closes, and there is no annual renewal. The amount of insurance for a Residential Owner Policy is the purchase price of the property and includes an inflation coverage provision when the fair market value of their property increases due to market conditions or as the result of home improvements up to a maximum of 400%**. The amount of insurance decreases by any amounts (other than legal fees and associated legal expenses) that we pay to cover a claim.
To make a claim inquiry, the insured should provide evidence in writing that they have suffered losses as a result of a defect covered by the policy. One of our claims associates will then determine if the claim is covered by the policy and will communicate the proposed method to resolve the claim.
When you’re buying your home, make sure to have a conversation about the benefits of title insurance with your legal professional to make sure you are fully covered.
Note that like all insurance policies, title insurance policies include conditions, exclusions and exceptions. For example, matters you agreed to, or which are known to you prior to the purchase of your home, but not to us, are not covered. Please read your policy for the full extent of your coverage.
– Jessica Orlowski, Senior Business Development Manager
* Policies in Western Canada may have limited coverage for fences and boundary walls. **Existing Homeowner Policies include an inflation coverage provision of 200%.
This article is intended to provide information that is of a general nature. For full particulars of coverage, including exceptions and exclusions, please review the actual policy issued. Sample policies are available on request. Sample policies may not represent the final policy language issued for any particular transaction. 02-2023/BC