What is title insurance?
Title insurance insures that your title is good both on and off the record, is not limited to the 50 year period required to be searched by the attorney, and protects against fraud and forgeries within the record. The bank will require that the buyer purchase title insurance from an approved title insurance company to insure its mortgage. This is known as Lender’s Title Insurance. The buyer must pay the premium even though the policy only benefits the bank. However, at the closing the buyer has the opportunity to purchase Owner’s Title Insurance that will benefit the buyer.
Title Insurance covers expenses related to correcting discrepancies over lot lines and land ownership. It is popular in the United States where land ownership records are so poorly organized that it is possible to buy one piece of land yet actually own a different parcel of land. The system for recording land ownership in Ontario was developed in the 1700’s and is regarded as the best in the world. Most counties are studying Ontario land registry system and using it as a model for straightening out their own systems. In Canada, title insurance applies more to issues of lot line encroachments. If the pool, or the garage, turns out to be half on the neighbours property and half on yours, the title insurance pays to move it. There is a misconception that title insurance replaces a land survey. The land survey determines where the actual lot lines are, and demonstrates the location of any permanent structures in relation to the lot lines. It’s final. If your buildings are within the lot se
