{"id":9120,"date":"2021-01-08T09:34:45","date_gmt":"2021-01-08T09:34:45","guid":{"rendered":"https:\/\/diamondlaw.ca\/?p=9120"},"modified":"2022-01-05T07:37:26","modified_gmt":"2022-01-05T07:37:26","slug":"what-is-title-insurance","status":"publish","type":"post","link":"https:\/\/diamondlaw.ca\/what-is-title-insurance\/","title":{"rendered":"What is Title Insurance?"},"content":{"rendered":"<div class=\"wpb-content-wrapper\"><p>[vc_row][vc_column][vc_column_text]<\/p>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">Buying a home can be terrifying. Perhaps you\u2019re overwhelmed by the various legal terms. Are you wondering what\u2019s \u2019title insurance\u2019 and do I need it?\u00a0<\/span><\/p>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">Perhaps we can help. <\/span><a href=\"https:\/\/diamondlaw.ca\/real-estate\/home-buyers-guide\"><span style=\"font-weight: 400;\">Purchasing a home<\/span><\/a><span style=\"font-weight: 400;\"> is a decision that\u2019ll affect the course of your life. Not only will it impact your immediate environment and future opportunities, but it\u2019s also one of the largest financial transactions most people will undertake.<\/span><\/p>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">Title insurance is perhaps one of the first things you\u2019ll need to consider when buying a home.<\/span><\/p>\n<h2 dir=\"ltr\"><b>How Title Insurance Works<\/b><\/h2>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">Firstly, a title is a legal document proving that you own a property. <a href=\"https:\/\/diamondlaw.ca\/lending-out-your-car-and-insurance-policy\/\">Title insurance is a policy<\/a> that covers you and your money lenders against any losses or damages that may incur against the property\u2019s title or ownership.\u00a0<\/span><\/p>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">The <a href=\"https:\/\/diamondlaw.ca\/title-insurance-buy\/\">title insurance<\/a> policy will cover the following:<\/span><\/p>\n<ul>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">An unexpected flaw or fault with the title ownership.<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Outstanding liens, such as unpaid utilities, mortgage, lawsuits, maintenance fees, or taxes.<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Fraud or errors that may arise from surveys or records.<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Disputes regarding property boundaries.<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Conflicting wills.<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The period between the finalizing of the sale and when the title is officially registered.<\/span><\/li>\n<\/ul>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">With conventional insurance, the cover is usually for future events. However, this <a href=\"https:\/\/diamondlaw.ca\/understanding-the-insurance-claims-process\/\">insurance protects you against claims<\/a> that have transpired in the past.<\/span><\/p>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">A clear title is necessary for any realty transaction.<\/span><\/p>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">To issue a clear title, a title company must do a thorough <\/span><a href=\"https:\/\/diamondlaw.ca\/real-estate\/title-ownership-transfer\"><span style=\"font-weight: 400;\">search on each title to verify<\/span><\/a><span style=\"font-weight: 400;\"> the property\u2019s legal ownership.\u00a0 It\u2019s also necessary to determine whether or not there are any outstanding claims or liens against it.\u00a0<\/span><\/p>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">Two examples that deem the title \u201cdirty\u201d are; if any erroneous surveys are done, or any unresolved building code violations are present.<\/span><\/p>\n<h2 dir=\"ltr\"><b>Creation of a Title Insurance Policy<\/b><\/h2>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\"><\/span><\/p>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">Once the property purchase agreement has been finalized, the closing agent will initiate the insurance process. A title search is then done either by the lawyer or the title agent. The customer then receives a preliminary report for review and approval. <\/span><span style=\"font-weight: 400;\"><\/span><span style=\"font-weight: 400;\">Upon escrow\u2019s instructions, all closing documents are recorded. The policy is only created once the recording is confirmed, demands are paid, and funds are disbursed.<\/span><\/p>\n<h2 dir=\"ltr\"><b>Types of Title Insurance<\/b><\/h2>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">There are two types of policies; one for the owner title and one for the lender\u2019s title.<\/span><\/p>\n<p dir=\"ltr\"><b>Owner\u2019s Policy\u00a0<\/b><\/p>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">With the owner\u2019s policy, the home buyer is protected. As the buyer, you\u2019re covered for any losses or damages that might incur if it\u2019s discovered that the property belongs to someone else. There might also be a defect, a lien on the title, the land is inaccessible, or unmarketable.\u00a0 The policy will cover these events.<\/span><\/p>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">The policy comes into effect on the date stipulated in the document.\u00a0 The following guarantees are also listed:\u00a0<\/span><\/p>\n<ul>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">That you\u2019ll have access to the land.<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">That you\u2019ll have the legal right to sell the property.<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">That you could convey a marketable title to a new owner.\u00a0<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">That you\u2019re free from any hindrance or defects, excluding the exceptions listed in the policy.<\/span><\/li>\n<\/ul>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">The policy value is equal to the purchase price of the property.<\/span><\/p>\n<p dir=\"ltr\"><b>Lender\u2019s Policy<\/b><\/p>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">This policy protects the company that has issued the mortgage. It covers them for the amount of the mortgage.\u00a0<\/span><\/p>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">Besides covering the lender for the losses that might incur, as mentioned under the \u201cOwner\u2019s Policy,\u201d it also ensures the lender has priority above other liens or creditors.<\/span><\/p>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">If a second home loan is taken out while refinancing the first; the second mortgage will take preference if a foreclosure has to occur. In this instance, the lender\u2019s policy will cover the first mortgage.<\/span><\/p>\n<h4 dir=\"ltr\"><b>Having trouble with your title insurance?\u00a0 Contact a real estate lawyer from Diamond &amp; Diamond Lawyers.<\/b><\/h4>\n<h2 dir=\"ltr\"><b>Title Insurance Coverage<\/b><\/h2>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\"><\/span><\/p>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">Title <a href=\"https:\/\/diamondlaw.ca\/understanding-your-insurance-coverage-before-travelling\/\">insurance also provides coverage<\/a> in the following situations:<\/span><\/p>\n<ul>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Building permits violation: This refers to removing of structures erected by the previous owner without permits.\u00a0<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Subdivision coverage: When a loan can\u2019t be secured due to the property not being subdivided correctly.<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Coverage for the address, ensuring that the property address and the one on the policy are the same.<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Covering a violation: when there is a pre-existing restrictive covenant with an adjacent owner and they would like to enforce it.<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Protection against the violation of zoning laws.<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Protection against possible post-policy claims.<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Protection against pedestrian and vehicular property access.<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Encroachment coverage is a protection in case someone erects a structure that infringes the property.<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">It covers supplement taxes prior to construction, change of ownership, or use.<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">All existing structures, landscaping, or future improvements are protected against damages arising from land usage for extraction or development of minerals and other substances.<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Automatic coverage increases.<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Trust coverage will protect the inclusion of a trust you might create.<\/span><\/li>\n<\/ul>\n<h2 dir=\"ltr\"><b>Do you Need Title Insurance?<\/b><\/h2>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">This insurance will cover you in the event of title defects. Although the owner\u2019s insurance is optional but beneficial, a mortgage lender might require it.<\/span><\/p>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">Ensuring the title would secure your <a href=\"https:\/\/diamondlaw.ca\/property-title-search\/\">ownership of the property<\/a>. Costs to defend a claim could be relatively high. We would recommend working with a lawyer specializing in <a href=\"https:\/\/diamondlaw.ca\/real-estate\/\">real estate<\/a> to assist in any such claims.<\/span><span style=\"font-weight: 400;\">An <\/span><a href=\"https:\/\/diamondlaw.ca\/get-a-free-consultation\"><span style=\"font-weight: 400;\">experienced real estate lawyer<\/span><\/a><span style=\"font-weight: 400;\"> can also assist you with the process of purchasing a property.\u00a0 We can also give guidance on what <\/span><a href=\"https:\/\/diamondlaw.ca\/real-estate\/pricing\"><span style=\"font-weight: 400;\">a reasonable cost would be<\/span><\/a><span style=\"font-weight: 400;\"> for your title insurance. <\/span><\/p>\n<p>[\/vc_column_text][vc_toggle title=&#8221;Benefits of Getting a Title Insurance&#8221; style=&#8221;round&#8221; color=&#8221;blue&#8221; el_id=&#8221;1610080358407-bc41020c-aeae&#8221;]<\/p>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">Title iInsurance protects you against:<\/span><\/p>\n<ul>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Legal documents not recorded properly, fraud, or errors arising from surveys.<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Heirs not fully disclosed, conflicting wills.<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Unexpected flaw or fault with property ownership.<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Disputes regarding the boundary.<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Outstanding liens, such as unpaid utilities, mortgage, lawsuits, maintenance fees, or taxes.<\/span><\/li>\n<\/ul>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">Title Insurance cCovers the period between the finalizing of the sale and registration of title.<\/span><\/p>\n<p>[\/vc_toggle][vc_toggle title=&#8221;Disadvantages of Getting a Title Insurance&#8221; style=&#8221;round&#8221; color=&#8221;blue&#8221; el_id=&#8221;1610080382150-0652cba2-a8fd&#8221;]<\/p>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">There are certain items not included in Title Insurance such as:<\/span><\/p>\n<ul>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Property defects revealed to you before purchase.<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Environmental hazards.<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Matters not included in the public record.<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Violation of zoning bylaws.<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Land claims.<\/span><\/li>\n<\/ul>\n<p>[\/vc_toggle][vc_toggle title=&#8221;Risks of Not Having a Title Insurance&#8221; style=&#8221;round&#8221; color=&#8221;blue&#8221; el_id=&#8221;1610080405085-949e3c42-8c09&#8243;]<\/p>\n<ul>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">If there are any title defects, you will not be covered.<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Your ownership will not be secured, and costs to defend such a claim can be very high.<\/span><\/li>\n<li dir=\"ltr\" style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">In the event of any legal costs or damages, you will not be covered.<\/span><\/li>\n<\/ul>\n<p>[\/vc_toggle][vc_column_text el_class=&#8221;pro-tip-sec&#8221;]<\/p>\n<h3 dir=\"ltr\"><b>PRO TIP:<\/b><\/h3>\n<p dir=\"ltr\"><span style=\"font-weight: 400;\">\u201cAlways prepare for the worst\u201d<\/span><\/p>\n<p>[\/vc_column_text][vc_column_text]<\/p>\n<h2 dir=\"ltr\"><b>What is Title Insurance FAQs<\/b><\/h2>\n<p>[\/vc_column_text][vc_toggle title=&#8221;What\u2019s the difference between a title commitment and a title policy?&#8221; style=&#8221;round&#8221; color=&#8221;blue&#8221; el_id=&#8221;1610080524707-d830ee54-dfbd&#8221;]<span style=\"font-weight: 400;\">A title commitment is a promise from a title company that they will issue you with a policy once the sale is completed. The title policy is an insurance policy protecting the new buyer against any future title problems.<\/span>[\/vc_toggle][vc_toggle title=&#8221;Do I get to pick my own title company?&#8221; style=&#8221;round&#8221; color=&#8221;blue&#8221; el_id=&#8221;1610080546599-e1ba23d2-5ca0&#8243;]<span style=\"font-weight: 400;\">Yes, you do have the right to choose your own title company.<\/span>[\/vc_toggle][vc_toggle title=&#8221;Where can I buy a title policy?&#8221; style=&#8221;round&#8221; color=&#8221;blue&#8221; el_id=&#8221;1610080574612-96286418-5cfa&#8221;]<span style=\"font-weight: 400;\">You can buy a title policy from a title insurance company.<\/span>[\/vc_toggle][\/vc_column][\/vc_row]<\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"<p>[vc_row][vc_column][vc_column_text] Buying a home can be terrifying. Perhaps you\u2019re overwhelmed by the various legal terms. Are you wondering what\u2019s \u2019title insurance\u2019 and do I need it?\u00a0 Perhaps we can help. Purchasing a home is a decision that\u2019ll affect the course of your life. Not only will it impact your immediate environment and future opportunities, but&hellip;<\/p>\n","protected":false},"author":1,"featured_media":11774,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"ngg_post_thumbnail":0,"footnotes":""},"categories":[812],"tags":[],"class_list":["post-9120","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-legal-needs","entry"],"_links":{"self":[{"href":"https:\/\/diamondlaw.ca\/wp-json\/wp\/v2\/posts\/9120","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/diamondlaw.ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/diamondlaw.ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/diamondlaw.ca\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/diamondlaw.ca\/wp-json\/wp\/v2\/comments?post=9120"}],"version-history":[{"count":0,"href":"https:\/\/diamondlaw.ca\/wp-json\/wp\/v2\/posts\/9120\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/diamondlaw.ca\/wp-json\/wp\/v2\/media\/11774"}],"wp:attachment":[{"href":"https:\/\/diamondlaw.ca\/wp-json\/wp\/v2\/media?parent=9120"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/diamondlaw.ca\/wp-json\/wp\/v2\/categories?post=9120"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/diamondlaw.ca\/wp-json\/wp\/v2\/tags?post=9120"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}