Title Insurance: What It Is, Why You Need It, and What It Actually Covers
When you buy or refinance a home, there are a lot of moving parts — lenders, lawyers, documents, timelines.
One item that shows up on your closing costs is title insurance.
Let’s break it down simply.
What Is Title Insurance?
Title insurance protects against issues related to the legal ownership of your property (the “title”).
In simple terms, it helps protect you if something goes wrong — either from the past or due to fraud.
For example, it can cover:
- Title fraud (someone trying to mortgage or sell your property without your knowledge)
- Errors in public records
- Unknown liens or debts tied to the property
- Boundary or survey issues
When they happen, they can be expensive and stressful to resolve.
Why You’re Required to Have It
Your lender requires title insurance in their name.
This protects the lender’s interest in the property (their mortgage).
- You (the client) pay for this policy
- Your lawyer or notary arranges it as part of closing
- You don’t need to shop for it yourself
What Does It Cost?
Typically:
- Around $300 (varies depending on the property and insurer)
- One-time cost — no renewals
Here’s the important distinction most people don’t realize:
- The lender’s title insurance only covers that specific mortgage
- If you refinance or switch lenders in the future, a new lender policy is usually required
Can You Get Your Own Coverage Too?
Yes — and this is where many people choose to add extra protection.
The lender’s policy protects the lender, not you.
You can also purchase an owner’s title insurance policy for yourself.
This gives you direct protection, including:
- Legal fees if there’s a title issue
- Coverage for fraud or identity-related property issues
- Help resolving ownership disputes
An owner’s policy is also a one-time cost and protects you for as long as you own the property — even if you change lenders later.
Given the rise in title fraud in Canada, this added protection is often worth considering.
Do You Need to Do Anything?
No — this is handled for you.
Your lawyer or notary will:
- Arrange the lender’s title insurance
- Include it in your closing costs
- Explain any optional owner coverage
The Bottom Line
- Title insurance is required by your lender
- It’s a one-time cost (typically around $300)
- Your lawyer handles the purchase
- The lender’s policy only covers that mortgage
- You can choose to add your own policy for long-term personal protection
Hi, I’m Jill, your mortgage pro. I am here to make the world of mortgages less confusing so you can feel confident in your financial decisions. Through my blog, I aim to provide you with the knowledge and guidance you need to make informed decisions. Your financial peace of mind is my top priority.
