Title insurance is a small line item on your closing statement. Typically a few hundred dollars. That protects you from problems most buyers don't know are possible. Here is what it actually does.
What Title Insurance Covers
A title insurance policy issued at closing covers the buyer against issues including:
- Title defects. Competing ownership claims, undisclosed liens, errors in prior registrations
- Title fraud. Someone forging documents to transfer your home out of your name
- Survey issues. Encroachments, boundary disputes, and zoning issues that were not obvious
- Building Code or zoning non-compliance. Work done by a prior owner without permits
- Forced removal. An order to remove an encroaching structure (a deck over a setback line, for example)
Some of these are catastrophic if they happen. Title fraud in particular has cost Ontario homeowners millions over the years. Title insurance is the practical defence.
What It Doesn't Cover
Title insurance is not home insurance. It does not cover:
- Damage from fire, water, weather, or theft
- Defects you knew about before closing
- Environmental contamination (a separate policy)
- Issues that arise after closing because of work you do
Why Lenders Require It
Almost every Ontario lender requires title insurance to fund a mortgage. Lenders want to know that if a title issue emerges. Say, a prior owner's lien surfaces years later. The insurance company stands behind the title, not their loan-to-value calculation.
How Much It Costs
For a typical Ontario residential purchase, a buyer policy runs $300 to $500 one-time, paid at closing. A combined buyer-and-lender policy is slightly more. The cost scales modestly with purchase price.
Compared with the value of your home and the risks the policy covers, it is one of the most cost-effective insurance products you'll ever buy.
Owner Policy vs. Lender Policy
If your lender requires it, you'll have a lender policy. That protects the lender, not you. We strongly recommend pairing it with an owner policy in your name. It is a one-time premium and it stays in place for as long as you own the home.
Title insurance is included as standard on every simplyclose closing. If you have questions about what your policy covers, get a free quote. We explain the coverage in plain English before you sign.