Title insurance is a one-time purchase (at closing) that protects you from issues related to the legal ownership of the property you’re buying. It’s designed to cover problems that may not have been discovered during the legal review process, or problems that show up months or even years after you move in.

When you buy a property, part of your lawyer’s job is to make sure that the title (which is the legal ownership record) is clear. This means confirming that the seller has the right to sell it, that there are no unpaid debts on the property, and that everything about the land and home complies with the law. But even with all these checks, things can slip through the cracks. That’s where title insurance comes in.

It acts as a safety net, covering you against specific risks that could become very expensive.

Title insurance in Ontario typically protects against the following types of problems:

• Title fraud or forgery: If someone steals your identity and takes out a mortgage against your home, or fraudulently sells your property, title insurance helps you fight the claim and recover losses. This happens more than people think.
  
• Undisclosed or unknown liens: If the previous owner owed money for things like property taxes, utilities, or unpaid contractor bills, those debts could be tied to the home you just bought. Title insurance covers you if you suddenly discover those liens after closing.
  
• Boundary and survey issues: Sometimes, the actual boundaries of the property don’t match what you thought you were buying. You may find out that part of your fence or driveway is on the neighbour’s land. Or a structure on your property encroaches onto theirs. Title insurance helps you with the legal and financial impact of these situations.
  
• Errors in public records or legal documents: Mistakes happen quite a bit. A spelling error, incorrect legal description, or a missing document can cause major issues with your ownership rights. Title insurance provides coverage to fix those problems.
  
• Zoning problems and building permit issues: In some cases, buyers discover after closing that an extra home addition, basement apartment, or structure on the property wasn’t built to code or didn’t have the proper permits. This can lead to expensive repairs, fines, or even forced removal by the municipality. Title insurance gives protection against some of these unexpected problems.
  
• Restrictions on use: Occasionally, buyers discover that their plans for the property are blocked by restrictive covenants or easements they weren’t aware of. These can affect your ability to renovate, add a structure, or use the land the way you intended.
  

It’s important to understand that title insurance doesn’t cover everything. It won’t pay for regular maintenance, repairs, or anything you knew about before buying the home. It also doesn’t cover environmental issues like soil contamination. But for the issues it does cover, the protection is significant.

One of the best parts of title insurance is that it’s not something you pay for every year. It is a one-time premium that you pay during the closing process, and it covers you for as long as you own the home.

So even if a title-related issue shows up 10 or 15 years after your purchase, your policy is still active. You don’t need to renew it, and you don’t need to worry about rising premiums. It’s a set-it-and-forget-it kind of coverage, but one that’s incredibly valuable if something ever goes wrong. That’s why it’s one of the smartest things you can buy with your new home.

Most lenders in Ontario require their own title insurance policy. This is not the same as the one that protects you as the buyer. The lender’s policy protects the bank or financial institution’s interest in the property, not yours.

That’s why it’s important to have a buyer’s policy in your name as well. Without it, you could be left to deal with major problems on your own.

The cost of title insurance depends on the value of the property, but it’s generally very affordable. In most cases, it ranges from $250 to $500 for a standard residential policy in Ontario.

Your real estate lawyer will usually arrange the title insurance on your behalf as part of the closing process. You’ll see it listed among your closing costs, but again, it’s a one-time fee that gives you lifetime coverage for that property.

To understand why title insurance matters, let’s look at some common real-world examples.

Imagine moving into your new home, only to find out later that the city placed a lien on the property due to unpaid utility bills from the previous owner. You never agreed to those charges, but legally, the lien stays with the property. Without title insurance, you’d have to pay those bills yourself to remove the lien. With title insurance, the policy would cover that cost.

In another example, someone could fraudulently transfer the title of your property to themselves, then attempt to sell it or refinance it. This type of fraud can take months to fix. Title insurance provides legal and financial support to restore your title and identity as the rightful owner.

In almost every case, the answer is yes.

Title insurance is not mandatory, but it’s strongly recommended for all homebuyers in Ontario. In fact, most real estate lawyers will automatically include it in their standard closing package unless you specifically ask them not to.

For a few hundred dollars, you’re getting protection that could save you tens of thousands of dollars. It covers legal fees, court costs, and settlement payouts in cases where you’d be forced to pay out of pocket. We can’t stress this enough – title insurance is one of the smartest, most cost-effective ways to protect yourself.

Buying a home is a big deal, and it comes with a lot of moving parts. Title insurance might not be the most exciting line item in your closing paperwork, but it’s one of the most important.

It gives you peace of mind that if something unexpected comes up with your ownership rights, you have protection in place.

If you’re not sure whether you have title insurance in place, ask your lawyer about it before closing. And if you’re buying in Ontario, don’t skip it. This one small step could make a big difference in your long-term financial security.

Reach out to our Team Paliwal today to explore your options and discover how you can enjoy a balanced, fulfilling lifestyle just a short journey from downtown Toronto.

Finding the right home can be overwhelming with so many choices and potential pitfalls. Since 2009, Team Paliwal has been turning challenges into opportunities.

Our unwavering priority is always putting our clients first. This is why Team Paliwal is ranked #1 and top 50 real estate teams on Canada on RankMyAgent.com. Our high ratings from satisfied clients is proof that you can get a well negotiated deal, avoid costly mistakes, and find a home that checks off all your boxes.