Title Insurance

Title insurance is a policy that protects a homeowner or a lender against losses caused by defects in a property's title — problems with legal ownership that a search of public records may not reveal. In Canada it is sold by private insurers, and the premium is usually a one-time cost paid at closing rather than a recurring monthly charge.

What title insurance typically covers

A title search by a lawyer or notary confirms who owns the property and what is registered against it, but a search cannot catch everything. Title insurance usually responds to issues such as:

Forgery or fraud in a previous transfer, including a fraudulent mortgage registered against the home.
Unpaid liens, utility arrears, or construction claims that surface after closing.
Errors in the public registry, missing heirs, or a former owner with a valid claim.
Undisclosed easements, encroachments, or municipal work orders.
Legal costs to defend the title in court, up to the policy limit.

What it does not cover

Title insurance is not property insurance and not a home inspection. It does not cover fire, flood, or damage to the building, and it does not cover environmental contamination or a known defect the buyer accepted before closing. Coverage limits and exclusions are set by the insurer, so the policy wording matters.

Why it matters to a borrower

Most lenders require title insurance on a purchase, refinance, or switch, because it protects their security interest in the property. Borrowers often buy an owner's policy at the same time. It can also reduce friction at closing: where a lender accepts title insurance instead of an up-to-date survey, the buyer may avoid the cost and delay of ordering one. The premium is part of closing costs, alongside the land transfer tax and the appraisal fee. Our guide to appraisal, inspection, and title insurance costs walks through each item.

An owner's policy generally stays in force as long as the insured owner, or their heirs, holds an interest in the property; a lender's policy covers the lender's interest until the mortgage is discharged. On a later refinance, a new lender's policy is often needed.

Frequently asked questions

Is title insurance mandatory in Canada?

It is not required by law, but most lenders require a lender's policy before advancing mortgage funds. Buyers typically purchase an owner's policy at the same time. Insurance sold in Canada is supervised by provincial or federal regulators, so confirm current requirements with your lawyer, notary, or lender.

Does title insurance replace a home inspection?

No. Title insurance covers problems with legal ownership of the property, not its physical condition. A home inspection examines the building itself — roof, foundation, plumbing, and electrical systems. They are separate protections, and many buyers arrange both before closing.

How long does title insurance last?

A lender's policy stays in effect until the mortgage is paid out and discharged. An owner's policy generally continues as long as the insured owner, or their heirs, keeps an interest in the property. Coverage does not automatically move to a new lender, so a refinance or switch may require a new policy.