Title Insurance in Residential Real Estate
I purchased my home 15 years ago. Do I have title insurance and if so, do I need to update it?
With the recent uptick in media coverage regarding fraudulent transfers of title and mortgage fraud, our firm has fielded a number of inquiries regarding the efficacy and necessity of title insurance. Below you will find some commonly asked questions regarding title insurance. Would you benefit from a complimentary consultation with a real estate lawyer at Lockyer & Hein LLP?
What is title insurance and what does it cover?
Unlike traditional types of insurance, Title Insurance is no-fault insurance that has no deductible and is purchased typically at closing. There is a one-time fee that is charged based on the assessed value of the insured property at the time the title insurance policy is ordered and lasts as long as you own the property.
The purpose of title insurance is to protect homeowner’s liability in the event there is any loss or damages suffered as a result of unknown liens, defects in title, mortgage fraud and fraudulent transfers of title. Depending on the type of policy ordered, the aforementioned list only provides a few examples of covered risks but is not an exhaustive list. For more detail on the types of covered risks associated with the most commonly purchased title insurance product, the Homeowner Platinum Policy from First Canadian Title, please see the link posted below.
How expensive is title insurance?
As mentioned above, title insurance offers a one-time fee and is calculated based on the current value assessment of the subject property. If you wanted to inquire the amount for your title insurance, we would be happy to obtain a quote on your behalf with First Canadian Title (FCT).
Does my title insurance policy require an update?
If you purchased title insurance when you purchased your property, you would have been given a copy of the policy from your lawyer’s office, for your records. Coverage provided is based on the assessed value of the property at the time the policy is purchased, therefore, it only covers an increase as the property value rises up to twice the amount of the policy. For example, if 15 years ago you ordered a title insurance policy on the assessed value of the property at $400,000 that title insurance policy will only cover up to $800,000 in losses/damages. Given the significant increase in value of property over the past 10 years, it is highly advisable to reassess your current coverage to ensure that your property is adequately insured.
How do I update my title insurance policy or obtain a new title insurance policy?
Should you require a consultation to discuss your existing policy or potentially obtaining a new policy, we would be happy to help! Please have your most current property tax bill handy and our office can assist in searching title, updating existing policies or obtaining a new one on your behalf.
For more information on Title Insurance please see the links below from the Financial Services Commission of Ontario, as well as, a link to the First Canadian Title (FCT) website, which will help guide you and even offers a free quote calculator!