Title Insurance: What every homeowner needs to know

You combed through websites, apps, newspapers and seen dozens of places until you finally found the perfect house!Your biggest achievement, your biggest asset – how do you keep it safe?Before you purchased your home, the property may have changed hands several times. Even with a new build, somewhere along the way there may have been an error made such as an incorrect survey, a non-existent permit or title-related issues that can affect your ability to sell, mortgage, or lease your property in the future. These are the types of things that a title insurance policy can protect you against.

What exactly is title insurance?

Title insurance is a unique form of insurance. Unlike home insurance where you are insuring the structure and contents, title insurance protects you, the homeowner, against actual loss as a result of challenges to the title (ownership) and other defects relating to your property. Plus, remedying the issues or legally defending your ownership can be very costly and stressful.

How much does a policy cost?

For a low one-time premium, you can ensure that you have the protection you need for as long as you own your home. The actual cost of a homeowner policy is based on your property value and varies by province. Your lawyer can provide you with a quote within minutes.

What does title insurance cover?

A typical title insurance policy covers common issues (known and unknown) that may have happened both before and after you’ve purchased your home. This is sometimes referred to as pre- and post-policy because the day you take ownership of your home is generally also the effective date of the policy.The main areas of coverage in the Homeowner Policy are:

·         Fraud — a person fraudulently transfers your property without your knowledge or consent.

·         Forgery — someone forges your signature on a registered document, which enables them to sell or mortgage your property.

·         Encroachments — if a structure built by a previous owner sits outside the property’s boundaries or if a neighbour builds a structure that is partially on your property after you purchase your policy.

·         Lack of building permits — if a previous owner completed work on your property without the required building permits, such as an addition or improvement, you could be forced by your municipality to remove or remedy the structure.

·         Duty to defend — if you have to protect and restore your title as a result of a covered title risk, FCT will pay for the legal fees and costs associated with it.