What is Title Insurance?

A magnifying glass hovering over the words Inspection, centering on a house with the word Home inside it

When people hear about insurance they think that it is just another expense that they don’t really need.  When it comes to your home it is a must.  Title insurance is your best and only protection from losing everything – your mortgaged or fully paid home in an instant.  What is title insurance?  Title Insurance is a form of indemnity insurance that protects you, as a homeowner, from financial loss due to defects in title of your real property. It will defend you against a lawsuit aiming to get your property from you.

Title insurance is a combination of two policies.  There is an owner policy and lender policy. The basic explanation of both, the owner policy protects the owner (buyer) and the lender policy protects the lender.  You only need to have a lender policy if there is a mortgage on the home.

Why You Need Title Insurance?

  • Protects your home from being taken away from you
  • Gives you invaluable peace of mind
  • Just a one time cost
  • Gives you comprehensive fraud coverage

house-car-vintage-old-largeWays Title Insurance Can Protect You

  • Someone may attempt to take your title through fraud or forgery
  • Encroachments disclosed by new surveys
  • Easements (acquired access for someone’s property)
  • Zoning non-compliance ( your property might not meet local municipal by-laws)
  • Another person having interest with the property (previous owner or part owner of property -especially when the property is owned by siblings or divorced couples)
  • Undisclosed heirs

How to Get Title Insurance?

The best way to get title insurance is at the closing of your home purchase.  To figure out title insurance costs, try using a title insurance calculator or ask the closing attorney what the cost of title insurance would be.

What are the Types of Title

There are different types of title depending on your situation.  The most common way is join tenancy but there are other way title can be conveyed.

  • Sole owner -The title is given under an individual who is not married. This is the simplest way in taking a title.
  • Joint tenancy –This title has equal right of survivorship.  This title is applicable to married or unmarried couple when they buy a house together.  When one of the partners die one gets full ownership as the survivor. Tax advantages are also there for survivors regardless of marital status.
  • Tenants-in-common – Taking a title under this allows two or more individuals buy a home together as tenants-in-common. They do not have equal shares as partners and could also sell their shares independently.

Taking a title is a very important matter you have to decide carefully before you attend the closing. Your title is your only proof that you own the property you live in.  You may consult a real estate attorney, accountant, or estate planner to gauge which title type fit your needs best.

Additional Information About Title Insurance

Title Insurance

Title insurance Buyer Needs

 Title Insurance Calculator