What is title insurance and do I need it when buying in Ontario?

Title insurance is a one-time premium policy that protects you — and your lender — against defects in the title to your property that are not discovered until after you have already bought it. In Ontario, title insurance is now standard practice in residential real estate transactions, though it is not legally required.

The policy typically covers issues like title fraud, liens that were not found in the title search, survey irregularities, zoning non-compliance, problems arising from existing permits, and certain encroachments. Unlike most insurance, you pay a single premium at closing and the coverage lasts for as long as you own the property.

Title insurance usually costs a few hundred dollars on a typical residential purchase and is separate from your legal fees — though your lawyer will typically arrange it as part of the closing. Lenders almost always require their own lender's title insurance policy; a separate owner's policy protects your own equity. Many lawyers now obtain an owner's policy as a matter of course because it simplifies the title review process and offers lasting protection. Ask your lawyer whether both a lender's and an owner's policy will be obtained for your purchase.