The Value of Title Insurance
Title insurance protects you and your investment as well as the lender.
When you purchase your new home in BC, your lawyer or notary will transfer title to your name. Property title legally proves you are its owner, they also list any registered mortgages and/or liens, describe any easements and provide many other important details.
Title insurance is a legal form of assurance as to the state of a property’s title. It protects lenders and purchasers against loss or damage suffered due to fraud, survey errors, encroachment issues, existing undisclosed liens, as well as any other issues that prevent you from having clear ownership of your property.
Title insurance will offer protection and cover the costs associated with defending and repairing your name, if your identity has been compromised or stolen. This includes reimbursement of lost wages for time spent away from work focusing on this process.
This insurance also protects you if someone was to build on your property or over the property line. If a neighbour builds a fence that encroaches on your property, your title insurer will cover the legal costs of defense.
Title insurance also provides “building compliance” coverage. If the home you purchased was previously renovated without proper permits, and if the renovations are not in compliance with building code regulations, then the insurance will allow for compensation on any costs associated with correcting the issues.
Title insurance also protects against any errors your lawyer may have made during the buying process. In these situations, the insurance would cover any costs associated with rectifying the mistakes and any losses suffered, saving you from a potential lawsuit.
Most mortgage lenders in Canada will require that you purchase title insurance to cover the original mortgage amount. Generally, it’s around $325 (one-time fee) and is included in your closing costs.
Your lawyer or notary will be available to answer any questions when you sign off on your mortgage.