Title Insurance in Canada: What Every Homebuyer Needs to Know
If you’re buying a home in Canada, you’ve likely heard your lawyer mention title insurance. But what is it, and why is it important? Whether you're a first-time buyer or a seasoned investor, understanding title insurance in Canada can protect you from costly surprises long after closing day.
What Is Title Insurance?
Title insurance is a one-time insurance policy that protects homeowners and lenders against losses related to problems with a property’s title (legal ownership). Unlike home insurance, which protects against future events like fire or flood, title insurance covers past issues that could affect your ownership rights.
In Canada, title insurance is commonly issued by companies such as First Canadian Title, Stewart Title, and Chicago Title Insurance Company.
What Does Title Insurance Cover in Canada?
While coverage varies slightly by provider and province, a typical Canadian homeowner title insurance policy may protect against:
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Unknown title defects
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Fraud and identity theft (title fraud)
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Errors in public records
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Liens or unpaid property taxes
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Zoning violations
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Encroachments (e.g., neighbour’s fence on your property)
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Survey defects
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Building permit issues
For example, if a previous owner did renovations without proper permits and the municipality later requires corrections, your policy may help cover those costs.
Is Title Insurance Mandatory in Canada?
Title insurance is not legally required in Canada. However:
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If you’re getting a mortgage, your lender will almost always require lender title insurance.
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Buyers are strongly encouraged to purchase owner title insurance for personal protection.
In provinces like Ontario, title insurance has become standard practice in most residential real estate transactions.
How Much Does Title Insurance Cost in Canada?
One of the biggest advantages of title insurance is that it’s a one-time premium, paid at closing. There are no monthly payments.
Costs typically range between:
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$250 to $500 for residential properties (depending on purchase price and province)
The policy lasts as long as you own the property.
Title Insurance vs. Title Search
A real estate lawyer will conduct a title search before closing to confirm legal ownership and identify registered issues. However, a title search may not uncover hidden problems such as fraud or clerical errors.
Title insurance provides an additional layer of protection beyond the traditional legal search.
Why Title Insurance Is Especially Important in Today’s Market
With rising property values across cities like Toronto, Barrie, and the greater Greater Toronto Area, the risk associated with title fraud has increased. Criminals have targeted vacant homes, rental properties, and even owner-occupied homes.
Title insurance can provide financial protection and legal support if ownership is challenged.
Who Should Get Title Insurance?
Title insurance is highly recommended for:
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First-time homebuyers
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Buyers of resale homes
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Buyers of pre-construction properties
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Investors and landlords
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Anyone refinancing their mortgage
If you're purchasing in competitive Ontario markets, protecting your investment is essential.
Final Thoughts: Is Title Insurance Worth It?
For a few hundred dollars paid once, title insurance offers long-term peace of mind. Considering that your home may be your largest investment, this protection can save you thousands — or even hundreds of thousands — in legal fees and losses.
If you're buying property in Ontario or anywhere in Canada, talk to your real estate lawyer about securing owner title insurance at closing.
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