DV Capital: Mortgage Broker & Private Lender Services.
What is Title Insurance?
Ontario, British Columbia & Nova Scotia.
What is Title insurance?
Title insurance differs from home insurance, which protects the homeowner and the lender, who require adequate insurance coverage on a property they are registering a mortgage against, from losses arising from theft, property damage, liability or fire. Title insurance is also different from mortgage default insurance, a requirement for mortgages for home purchases where the down payment is less than 20% of the purchase price. Title insurance protects the homeowner or mortgage lender, depending on who the policy is in favour of, from losses arising from title or ownership issues. It’s important to understand that in almost all cases, a mortgage lender requires coverage when funding a mortgage for either purchase or refinancing, often at the borrower’s expense. One of the main differences between title insurance and other types of insurance is that title insurance might cover risks from past events before purchasing and closing on the property. In most cases, one can obtain coverage after closing; however, it is generally advisable to have coverage in place when closing the purchase or refinancing, and again, it might needed by your mortgage lender before they advance funds. A property owner may obtain a property-owner policy, separate from a lender policy, at their expense.
What Does title Insurance Cover?
Title insurance provides property owners and lenders with coverage against multiple issues with respect to ownership of the subject property, including but not limited to:
Title Fraud or Mortgage Fraud:
Someone that has fallen victim to identity theft can be a target for title fraud. A fraudster may attempt to transfer the title of someone else’s property into their name, thus stealing ownership of a victim’s property. Title insurance might be able to help cover legal expenses and help defend title. If a property owner’s property was mortgaged by a fraudster posing as the true property owner, title insurance will help protect the actual property owner. In other cases, fraud or forgery before and after closing the purchase or refinance.
Property Enroachment Issues:
If a structure is unintentionally built on a neighbouring property and needs to be demolished or moved, title insurance can help with costs associated with fixing the issue. This sometimes happens when the previous property owner built without confirming lot line boundaries. This also becomes problematic if renovations were completed without the appropriate permits and the municipality steps in and requests that you remedy the situation.
Title Issues:
If you discover a title issue after you’ve bought the property that challenges the integrity of your property ownership, title insurance can be helpful. In other cases, if the prior owner of the property left unpaid utilities or property taxes that resulted in pre-existing liens, title insurance will assist with paying off said liens from title of the property.
What Property Types Can Be Title Insured?
In Canada, homeowner and lender policies are typically available for numerous property types, some of which include:
- Single-Family Dwelling
- Multi-Family Apartment Buildings up to 6 Units.
- Condominium or Strata Unit
- Cottage or Seasonal Property
- Vacant Land Intended for Residential Use
- Mobile Homes
- Mixed-Use Properties
- Industrial
- Office
- Retail
- Hospitality
- & more
Title Insurance Takeaways.
Title-related issues might prevent you from selling or mortgaging your property. Insurance coverage will be in force as long as one owns their property and, in some cases, will cover legal expenses related to a claim. Title insurers will assess each claim and do their best to find fault in the insurer party, similar to a home or auto insurer. Compensation is not guaranteed when a claim gets filed. For instance, if one was aware of a title issue before purchasing and closing a property, they might be out of luck. It is crucial to thoroughly review and understand the inclusions and exclusions of one’s policy. Specialized insurance coverage exists for property owners and mortgage lenders. A mortgage lender’s title insurance policy is related to the mortgage size. It is worthwhile for a property owner to consider obtaining coverage, especially considering the potential pitfalls and issues that may result in hundreds of thousands of dollars of expenses.
To learn more about insurers and coverage options in Canada:
General Inquiry.
DV Capital Corporation.
Local: 416-839-5874
Toll-Free: 1-866-839-5874
Email: [email protected]
FSRA License: 13186
NS License: 3000348 | 3000349