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Title Insurance is gaining more and more popularity throughout the media. At one time, title insurance was not common throughout the mortgage industry, but with the increase in mortgage fraud, it has become more and more critical; however, what is title insurance?

Title insurance is designed to provide comprehensive insurance against risks associated with home buying. Some of these risks associated with home buying include zoning issues, claims of mental capacity, lack of an up to date survey, incorrect legal services, and claims to title. It also insures against title defects that could occur. For example, there could be ownership claims, liens, undischarged mortgages, consents, and other related title issues. It will also cover compliance’s issues and issues with access. For example, some of these issues could include work orders, boundaries, tenancies, rights of way, and certain easements. This type of insurance will remain in force for as long as the purchaser owns the property. The title insurance will is also supposed to outlive the certification of your lawyer. Usually, insurances stop if the person who certifies the insurance passes away or stops practicing law.

The first thing to understand is that title insurance provides an insurance title. It does not provide a marketable title. This means that if something is wrong, and a prospective purchaser will not accept a new title insurance policy at no cost and provided the insurer does not go bankrupt. The insurer will either payout on the policy or will repair the defect to the title. Overall, it does not matter what the title says, as long as the home purchaser is willing to purchase title insurance coverage. Most people would rather purchase an insurance, then spend a lot of money completing a full assessment on the property. Most title insurance companies that operate in Canada have originated in the US. This assumes that there is plenty of demand for title insurance.

Title insurance can be a valuable and effective tool if used correctly; however, some companies deliberately and effectively try to persuade many peoples school of thought. By using some programs offered by lawyers and title insurance companies, it can literally save the home purchaser hundreds of dollars in closing costs. These costs can vary wildly between lawyers, so when asking about title insurance, make sure that you get a quote for both your lawyer, and the title insurance costs. Also, some companies claim to be ‘closing centers’. These companies will do only the bare bones work at a low price. Lawyers are usually cut a deal to sign there name on the bottom line. This is not correct because the lawyer actually needs to do there job correctly, instead of just getting paid to sign.

A great advantage of title insurance is in regards to older homes. Some older homes have been registered under the Registry System where a adjoining property search and a 40 year search to a good root of title is required.

In Ontario, the full electronic registry system will be the normal process. It is expected that title insurance will occur in all transactions, and will be completed by computer processing. When selecting a lawyer, make sure that they have completed all the required title insurance courses, have completed Terranet courses, and have a full working knowledge of the electronic registry system, so they can advise you correctly. A closing center does not have these details, so they cannot properly advise you. The Law Society had passed a rule that requires the lawyer to properly inform the home purchaser of all the details on title insurance, and how title insurance works. A lawyer will be able to refer back to you later and advise you if there is any trouble.  Also, if you have found a good lawyer, then make sure that you refer them business. Referral business is how a lawyer survives.

The lawyer has the full responsibility to inform you of all the details involving title insurance. Make sure you choose a lawyer that is well informed on the topic, and make sure that they have all the necessary qualifications to complete your transaction as easily as possible. Consider your options carefully before coming to a decision on title insurance.

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