When you buy a home, you receive "title" — the legal right to own and use the property. Title insurance protects against losses arising from problems with that title, both known and unknown at the time of purchase. Unlike most insurance that covers future events, title insurance covers past events that affect your current ownership.
| Risk Type | Example | Covered? |
|---|---|---|
| Title fraud | Someone forged documents to transfer your property | Yes |
| Survey/encroachment issues | Neighbour's fence is on your property | Yes |
| Unpaid liens | Previous owner didn't pay contractor; lien on title | Yes |
| Zoning violations | Previous renovation didn't comply with zoning | Yes |
| Errors in public records | Mistake in land registry affecting your ownership | Yes |
| Unpermitted work | Seller added addition without permits | Yes (some policies) |
| Forced removal of structure | Municipality orders removal of deck built over easement | Yes |
| Physical damage to property | Fire, flooding, wear and tear | No (home insurance) |
| Known defects disclosed at sale | Defect you were aware of before purchase | No |
Title insurance in Canada is a one-time premium paid at closing — there are no annual renewals. The cost is based on purchase price:
| Purchase Price | Typical Premium |
|---|---|
| Under $300,000 | $200–$300 |
| $300,000–$600,000 | $250–$400 |
| $600,000–$1,000,000 | $350–$500 |
| $1,000,000+ | $500–$700+ |
Two major providers in Canada: FCT (First Canadian Title) and Stewart Title. Your lawyer will typically arrange it and include the premium in the closing statement.
There are two types of title insurance:
Most lawyers purchase both simultaneously. The combined premium is only slightly more than the lender's policy alone — always get both.
Historically, buyers obtained a Real Property Report (RPR) — a survey showing the property boundaries and structures — before purchasing. This is still common in Alberta. Title insurance has largely replaced the need for an RPR in other provinces because it covers survey-related risks without the $1,000–$2,000 cost of a new survey.
| Title Insurance | Real Property Report | |
|---|---|---|
| Cost | $250–$500 (one-time) | $1,000–$2,500 |
| Covers encroachments | Yes (financially) | Yes (visually identifies them) |
| Shows exact boundaries | No | Yes |
| Required in Alberta | Optional | Often required by sellers |
| Required by lenders | Usually yes | Usually no (with title insurance) |
Technically title insurance is not legally required — but practically, almost all Canadian home buyers get it because:
The only situation where you might skip the owner's policy is if you're buying with cash, the lender doesn't require it, and you've had a thorough survey and title search completed. Even then, most lawyers strongly recommend it.
Title fraud — where criminals forge documents to transfer your property's title and take out a mortgage in your name — has occurred in Canada and resulted in homeowners being evicted from properties they legitimately owned. Title insurance covers the cost of defending your ownership and restoring your title in the event of fraud.
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