My lender requires title insurance — does that cover me too?

No — a lender's title insurance policy protects only your mortgage lender, not you personally. This is a common and important misunderstanding. When a lender requires title insurance as a condition of advancing your mortgage, they want protection for their loan — the policy covers losses the lender suffers if title turns out to be defective. It does not compensate you for your own financial losses.

To protect yourself, you need a separate owner's title insurance policy. The good news is that in most Ontario residential purchases, both policies are obtained at the same time during closing, and the combined cost is only marginally higher than the lender's policy alone. Your lawyer typically arranges both together.

Here is a practical example of why you need your own policy: if title fraud results in your property being fraudulently transferred or mortgaged, the lender's policy protects the lender. But your equity — your ownership stake — is at risk. An owner's policy protects your equity and covers the legal costs and financial losses you personally experience as a result of a title problem.