If you have bought a property in Ontario, your lawyer almost certainly recommended title insurance. Most buyers say yes without fully understanding what it is. Here is a clear explanation of what title insurance covers, why it matters, and whether you actually need it.

What is title insurance?

Title insurance is a one-time policy that protects you and your lender against losses related to problems with your property's title. Unlike other types of insurance that protect against future events, title insurance also covers issues that may have existed before you purchased the property.

"Title insurance does not replace a title search. It works alongside it. Think of it as a safety net for the things a search cannot always uncover."

What does it cover?

A standard title insurance policy in Ontario typically covers:

• Fraud and forgery.
  Including someone fraudulently transferring your title or registering a mortgage against your property without your knowledge
  
  

• Survey errors.
  Discrepancies between the survey and the actual property boundaries
  
  

• Encroachments.
  Structures on your property that cross onto a neighbour's land, or vice versa
  
  

• Outstanding liens.
  Unpaid debts from a previous owner that were not discovered during the title search
  
  

• Zoning violations.
  Existing structures that do not comply with zoning bylaws
  
  

• Title defects.
  Errors in previous registrations or documents in the chain of title

What it does not cover

Title insurance does not cover everything. It generally does not protect against:

• Issues you were aware of before purchasing

• Environmental hazards or contamination

• Problems that arise after your purchase that are unrelated to title

How much does it cost?

Title insurance is a one-time premium paid at closing. For a residential property in Ontario, the cost is typically between $150 and $400 depending on the purchase price. Compared to the protection it offers, most real estate lawyers consider it exceptional value.

Do you need it?

In practice, almost all residential real estate transactions in Ontario include title insurance, and most lenders require it as a condition of the mortgage. Even if your lender does not require it, it is strongly recommended.

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If you have questions about title insurance as part of your transaction, your lawyer can walk you through the specific policy before closing. It is always worth understanding exactly what you are protected against.