When you sit down with your lawyer to sign closing documents, title insurance will come up. Most buyers nod and sign without fully understanding what it covers. Here’s a clear breakdown of what title insurance is, what it protects, and whether Ontario buyers should get it (spoiler: yes).
1
What Title Insurance Covers
Title insurance protects against hidden risks in a property’s ownership history that aren’t discoverable through standard searches:
• Title fraud — someone forges documents and transfers/mortgages “your” property
• Outstanding liens — a contractor the previous owner didn’t pay comes after your property
• Unpermitted renovations — prior work done without permits creates municipal orders
• Boundary encroachments — a fence or structure is on the neighbor’s land
• Survey errors or unknown easements from historical records
2
Owner’s Policy vs. Lender’s Policy
There are two types: Owner’s Policy protects you (the homeowner) for as long as you own the property — one-time premium of $300–$500. Lender’s Policy protects only your mortgage lender — required by most banks, separate cost. The Lender’s Policy does not protect you at all. Make sure you purchase both. The Owner’s Policy is what most lawyers strongly recommend, and it’s genuinely excellent value at this price point.
3
Title Fraud Is Real in Canada
Canadian title fraud cases are well-documented. Criminals impersonate homeowners using forged IDs and fraudulent notarizations to sell or mortgage properties they don’t own. Owners have returned from trips abroad to find their home has been sold. With an Owner’s Policy, the title insurer covers legal costs and compensation — you don’t face this nightmare alone and out-of-pocket.
4
My Recommendation: Always Get It
For a $300–$500 one-time premium on a property worth $700,000+, title insurance is one of the best-value purchases in a real estate transaction. I recommend it to 100% of my clients. The major Ontario providers are FCT (First Canadian Title), Stewart Title, and Chicago Title — your lawyer will facilitate the purchase during closing. Don’t skip the Owner’s Policy to save a few hundred dollars.
Title Insurance vs. Land Survey
Many buyers ask: “Does title insurance replace a new land survey?” In most cases, yes — title insurers accept the existing survey or property documents, and the policy covers the issues that a survey would identify. New land surveys cost $1,500–$3,000+, while title insurance runs $300–$500. Unless you’re planning to build a structure near property boundaries, title insurance is the practical and cost-effective choice.
AZ
Arthur Zhao, Broker
SRS · ABR · MCNE · AZ Real Estate Team
📞 416-888-6161 · arthurzhao.realtor
Title Insurance Ontario
FCT
Title Fraud Canada
Ontario Home Buying
Unpermitted Renovation
Toronto Real Estate
