TITLE INSURANCE AND YOUR HOME PURCHASE
ALL ABOUT TITLE INSURANCE
Most people who have car, home and health insurance have probably made claims and wouldn't consider being without it. However, it might be difficult to find a homeowner who has made a claim on their title insurance which could lead a person to think that it may not be necessary.
Title insurance covers the largest investment most people have and if there was a loss, it could be devastating. Title insurance indemnifies the policy holder from financial loss sustained from defects in the title to the property. The policy holder is determined by their interest in the property.
An owner's title policy protects the owner of the property from title issues that may arise other than the mortgages that are being placed on the property at the time of purchase. The title of the property goes back in time to check that clear title (no unsatisfied liens or levies and poses no question to legal ownership) was passed from owner to owner up to the current seller.
A mortgagee's or lender's policy protects the lender by guaranteeing they have an enforceable lien on the property and legal claims from parties asserting they have a claim against the property. Lender's generally require the borrower to provide this coverage.
The title search is an examination to determine and confirm legal ownership and if there are clouds on the title so the seller can pass a clear title. A cloud is defined as any document, claim, unreleased lien or encumbrance that might invalidate or impair the title to real property.
If a person passes title to a buyer that has unsatisfied liens on the property, the new buyer could become responsible for the money owed and it could affect their ability to sell the property in the future.
Unlike most insurance that has a specific term and periodic premiums, title insurance covers the insured for a single premium. An owner's policy lasts for as long as they or their heirs have an interest in the property. It guarantees the title up to the date and time that the property was deeded to you and recorded in the public records.
The majority of homes purchased in America have title policies insuring the new owner. You could live in the home for five, ten or twenty years without an incident. Then, when you're ready to sell the home, a title claim could happen. The title policy would still protect you at that point. It is a peace of mind coverage that is part of the investment in your home.
NOTE: Although originally an American article, the issues referenced in the above post are very similar to those in Canada. Here is some further information on the subject specifically about Ontario & Canada in regards to Title Insurance.
Title Insurance
Typically, you purchase residential title insurance when you buy your home. You can buy a residential title insurance policy at any time while you own a property. Talk to your lawyer or insurance representative to understand your coverage options. A one-time premium covers the insured property as long as you own it.
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What you need to know before buying title insurance | CBC News
An increasing number of homebuyers are turning to title insurance as a cheaper alternative to land surveys, but experts stress it's important to know what you're buying - especially what's covered and what's not. A Nova Scotia man learned that lesson the hard way after discovering the backyard he thought he'd just purchased with a new house wasn't his after all.
Title insurance - FREE Legal Information | Legal Line
What is title? Title is a legal term meaning registered owner of real property. Title can be held by one person, or by two or more people as "joint tenants" or "tenants in common". With both joint tenants and tenants in common, the property can be owned in whatever percentage shares the owners decide.
Title insurance really isn't optional | The Star
Despite the fact that residential title insurance has been commonplace in Ontario for the last 15 years, many of my clients still ask me what it covers just as we are about to sign the closing papers for their home purchase.
Three things homebuyers need to know about title insurance
Title insurance is becoming increasingly promoted in real estate transactions as a hedge against potential defects in a properties title. Purchasing title insurance does provide financial coverage for certain types of defects, and as such is recommended as an important part of your due diligence in any property purchase.
Title insurance can provide peace of mind
Just what you need -- another kind of insurance to buy. Given the pressure to insure your life, health and possessions, feelings of insurance fatigue are natural. But keep an open mind about an increasingly popular product called title insurance.