Do I have title insurance?
It seems strange, but a lot of people who have title insurance ignore it and a lot of people who have a lender’s policy believe that they are insured as homeowners. That causes a lot of confusion.
Why does this happen? Homeowners who get title insurance generally get it when they purchase their property. It includes one of many fees on their bills when they buy a home. It’s not something that you purchase on your own. It’s included, in many cases, in a big package of legal documents that homeowners sign when they purchase their property.
If you opt for title insurance it is a one-time payment and you have it as long as you own your home. You are never asked to renew it and you don’t have to pay a monthly premium.
Sometimes when a title insurance purchase is made as part of a mortgage purchase, the homeowner erroneously thinks that they have an owner’s policy when in fact, they have a lender’s policy.
A lender’s policy protects the lender and the priority of the mortgage, not the homeowner. But it does provide advantages to the homeowner too, like a smoother legal closing process and a reduced transaction cost.
When fraud happens, it’s the title insurer that pays the fraudulent mortgage not the homeowner who is a victim in the process.
So how do I know if I have title insurance?
- Verify the real estate closing documents from your notary or lawyer.
- Ask your notary or your real estate lawyer.
In Canada, title insurance was introduced 25 years ago and, until recently, it was not a common practice to include it in the real estate transactions. So if you bought your home 10 years ago, you likely don’t have title insurance.