Title insurance타이틀 보험 (소유권 보험)

What is it?

Title insurance pays you if a problem with your home’s title (your legal ownership) causes a loss. It is not home insurance, which covers things like fire. It covers problems with your legal rights to the property.

You usually buy it through your lawyer at closing and pay the premium once. A typical owner’s policy is written to stay in force for as long as you own the home. Check the exact term and conditions in the policy itself.

In Ontario, title insurance is an insurance contract under the Insurance Act. The Act requires every title insurance contract to be in writing and to state clearly the maximum amount the insurer will pay.

Owner’s policy and lender’s policy

There are two kinds of title insurance, and they protect different people.

A lender’s policy does not protect you. Buying both is common; ask your lawyer for the premium of each.

What does it usually cover?

Coverage differs by insurer and policy. The items below are what owner’s policies sold in Ontario commonly cover; the exact terms are in the policy.

• Title fraud: someone uses your identity to sell or mortgage your home.
• Existing claims the title search did not catch: an unknown lien, easement, or unpaid taxes or utility charges.
• Errors or omissions in the land registry record.
• Survey and boundary problems: a building that crosses the lot line (encroachment), or a neighbour’s structure on your land. Because of this, many buyers choose title insurance instead of a new survey.
• Municipal orders to remove or fix work done without a permit (subject to conditions).
• Legal costs of dealing with a covered problem.

What does it not cover?

• Problems you already knew about. Issues found in the title search or inspection and listed as exceptions in the policy are also excluded.
• Problems you create after you buy, such as an addition built without a permit.
• The physical condition of the home: leaks, mould or foundation cracks belong to the home inspection and your home insurance.
• Other exclusions written in the policy. Environmental contamination and some Indigenous land claims are examples; they vary by policy.

What is left out is in the exclusions section of the policy. Ask your lawyer to walk you through the exclusions before you sign.

Do you have to buy it? The lawyer’s duty

No. The Law Society of Ontario’s Rules of Professional Conduct require your lawyer to assess all reasonable options to assure title and to tell you that title insurance is not mandatory and is not the only option.

The other options are a new survey, which confirms boundaries and building locations, or relying on the lawyer’s title search and opinion alone. A survey costs time and money and only deals with boundary issues, so in practice many lawyers suggest title insurance. But title insurance does not replace your lawyer’s services, such as the title search; the Law Society says so too.

Your lawyer may not receive any payment from an insurer for recommending a title insurance product, and must tell you that no commission or fee is being paid to the lawyer by any insurer.

What does it cost?

The premium is paid once and usually depends on the purchase price (and the mortgage amount). Rates differ between insurers, so this site does not list a figure. Your lawyer bills it as a disbursement; when you ask for an estimate, ask the premium for the owner’s policy and the lender’s policy separately, and which insurer it is.

Insurers and insurance sales in Ontario are overseen by the Financial Services Regulatory Authority of Ontario (FSRA) under the Insurance Act. The rules for lawyers come from the Law Society.

How is it different from the government’s Assurance Fund?

Ontario has a Land Titles Assurance Fund under the Land Titles Act. It is a public fund that people who lose land because of a fraudulent registration or a registry office error can apply to.

But the fund is available only if you cannot recover your loss another way. If the loss came from a fraudulent registration, you must also have shown the required due diligence. You must apply within six years of the loss, and there is a separate application and review process. Title insurance is handled by the insurer and often covers legal costs, so it is seen as faster and broader. Neither replaces the other.

Example

Condos and pre-construction

You can insure a condo unit too. Boundary issues are rare, but fraud, registry errors and unknown claims can affect condos as well.

For a pre-construction condo, title is created at the final closing, so that is when the policy is bought. A brand-new home is not free of title risk; a construction lien from an unpaid contractor is one example. Ask your lawyer what role title insurance plays at a pre-construction closing.