Title insurance Ontario is a one-time insurance policy that can protect against specified problems affecting a property’s title or certain related risks. Whether you are arranging title insurance Toronto for a purchase or refinance, ask your Ontario real estate lawyer to explain the policy before closing; the title insurance cost and coverage depend on the particular transaction.
Title insurance in Ontario: when to get it and why it matters
Title insurance protects an owner or lender against certain covered losses connected to the legal ownership of land, not against every problem with the building. In Ontario, title means the legal ownership interest in land recorded in the land registration system, together with the rights and burdens that affect it.
A policy may respond to risks that existed before closing but were not found or could not readily be resolved through ordinary searches, such as a prior fraud or forgery, an undisclosed registered interest, or some survey, zoning, or work-order risks. The policy wording, exclusions, exceptions and endorsements control what is actually insured.
The benefits of title insurance can include legal defence and compensation for a covered loss, subject to the policy. It is a risk-management tool alongside careful legal work, not a substitute for it.
Do you need title insurance in Ontario?
An owner’s title insurance policy is generally optional in Ontario, while a mortgage lender may require a lender’s policy under its financing instructions. The right choice depends on the property, the lender, the searches available, the condition of title and the terms the insurer is prepared to offer.
For a purchase, the decision is normally made before closing, after the lawyer has reviewed the transaction. On a refinance, the new lender may require coverage for its mortgage even if an owner bought a policy years earlier. A person who already owns property may be able to seek coverage later, but availability, underwriting and the scope of coverage depend on the insurer and the facts known at that time.
For example, a buyer purchasing a $850,000 Toronto condominium with a new mortgage may be asked by the lender to obtain a lender’s policy. The buyer can also consider an owner’s policy to protect the buyer’s own covered interest; the lender’s policy alone is not insurance for the buyer’s equity.
What your lawyer does before recommending title insurance
Title insurance complements legal due diligence; it does not replace a lawyer’s title review, advice or the searches appropriate to the file. Before closing, our title insurance lawyer reviews the Agreement of Purchase and Sale, the parcel register, registered instruments, lender instructions and the proposed policy terms.
The work may also include reviewing the statement of adjustments, tax information, execution searches where appropriate, condominium documents, surveys or reference plans, and other relevant off-title searches. What is needed varies: a rural property, a commercial unit or a home with an older survey can call for different inquiries than a standard urban condominium.
A solicitor’s opinion on title is the lawyer’s legal assessment based on the title review and available information. title search vs title insurance is not an either-or choice: a search helps identify known issues, while insurance may address some specified risks that remain.
Where a search reveals an actual concern, the lawyer may seek a discharge, a correction, further evidence, an undertaking, a policy endorsement, or another solution before closing.
Owner’s policy and lender’s policy: who is protected?
A lender’s title insurance policy protects the lender’s mortgage interest, while an owner’s title insurance policy is intended to protect the registered owner against covered loss. They are separate policies with different insured parties, limits and terms.
| Issue | Owner’s title insurance policy | Lender’s title insurance policy |
|---|---|---|
| Who is insured? | The registered owner named in the policy. | The mortgage lender named in the policy. |
| Primary purpose | Addresses the owner’s covered loss affecting ownership or marketability of title. | Addresses covered loss affecting the lender’s security for its loan. |
| Does it protect the owner’s equity? | It may, subject to its terms and coverage limit. | No. It protects the lender, not the borrower. |
| When is it commonly arranged? | At purchase, title transfer or another eligible transaction. | When required by lender instructions for a purchase or refinance. |
Review the insured names, policy amount, exceptions and endorsements rather than assuming two policies provide identical protection.
What is home or property title insurance—and what it is not
Home or property title insurance is another name for insurance addressing specified title-related risks connected with a home or other property. It is not a home warranty, and it does not guarantee the physical condition of the roof, plumbing, wiring, structure or appliances. For a closer look at typical coverage and limitations, read our article on home title insurance.
It is also different from home insurance, which commonly covers insured damage or liability risks such as fire, water damage or theft. It is not mortgage loan insurance either: mortgage loan insurance protects the lender if a borrower defaults on an insured mortgage; it does not resolve a title defect for the owner.
Known risks, physical defects, environmental contamination and matters specifically excluded or excepted from the policy may not be covered. A buyer concerned about a basement leak, asbestos, a septic system or contamination should seek the appropriate inspection, investigation or separate insurance advice instead of relying on title insurance.
How to buy title insurance in Ontario
Title insurance is commonly arranged through the real estate lawyer during a purchase or refinance, subject to the lender’s instructions and the insurer’s requirements. The lawyer can explain the proposed coverage and incorporate the premium and relevant disbursements into the closing figures.
- The lawyer reviews the Agreement of Purchase and Sale, title and transaction risks, then identifies whether owner and/or lender coverage is being considered.
- The lawyer reviews the available policy, exceptions, endorsements, premium and any insurer requirements with the client and, where applicable, follows lender instructions.
- On closing, the lawyer registers the transfer and/or mortgage electronically in Ontario’s land registration system and completes the other closing steps.
- The premium is shown in the closing financial records, often including the statement of adjustments or the lawyer’s trust statement, as applicable, and the policy or certificate is retained with the closing package.
Insurers active in Ontario include FCT Insurance Company Ltd. (First Canadian Title), Chicago Title Insurance Company, Lawyers’ Professional Indemnity Company (TitlePLUS), and Stewart Title Guaranty Company. The available product and terms should be assessed for the file rather than selected by brand alone.
Title insurance cost in Toronto and Ontario
Title insurance cost is usually a one-time premium, but the amount depends on the insurer, property value, transaction type, type of policy, coverage amount and endorsements. Ask for the itemized premium and legal disbursements before closing so you can see what is being paid and why.
The premium is separate from Ontario land transfer tax, Toronto municipal land transfer tax where applicable, registration fees, legal fees and home insurance. It is also separate from mortgage loan insurance premiums, if mortgage loan insurance is required for the financing.
For example, a buyer of a $1,100,000 freehold home should not estimate a policy premium from an old online formula. Before the closing date, the buyer should review the current quote, the policy limit and any added endorsement cost with the lawyer, alongside the transfer tax and adjustment amounts.
Is title insurance worth it for your transaction?
Title insurance may be worth considering when it addresses risks that remain after proper legal work, but it should be evaluated against the property and the actual policy terms. It is not automatically the complete answer to every title, boundary or land-use issue.
- Resale home: Consider the title history, available survey, encroachments, work orders and the policy exceptions.
- Refinance: Confirm the new lender’s requirements and whether existing owner coverage has any relevance to the new financing.
- Condominium: Review title, the status certificate and the transaction documents; title insurance does not replace condominium due diligence.
- Rural or vacant land: Consider access, boundaries, easements, zoning, wells, septic systems and any need for added searches. Vacant land may not be eligible for every policy, so confirm this with the lawyer and insurer.
- No current survey: Discuss whether title insurance, a new survey, additional investigation, or a combination is appropriate.
For example, a buyer acquiring a $620,000 older detached house without a current survey may learn that a rear shed appears close to a boundary. The lawyer may review the available plan and policy terms, but may also advise that a survey or further investigation is appropriate if the boundary position matters to the buyer’s intended renovation.
Title insurance also does not eliminate the need to deal with a known defect. Learn more about why is title insurance important when assessing a property’s title before committing to a transaction.
How to know if you have title insurance
Check your closing reporting package, statement of adjustments and policy or certificate to find out whether you have title insurance. You can also ask the lawyer who acted on the purchase, refinance or property title change for a copy of the closing documents.
The policy wording, insured names, property description, coverage amount and date matter. An existing owner policy may not answer the needs of a later refinance, transfer or sale, so have it reviewed before relying on it.
What to do if a title problem arises
If a title problem arises, preserve the documents and notify the title insurer promptly as required by the policy. Do not independently admit liability, settle a claim or pay for a remedy before obtaining legal advice and giving the insurer an opportunity to respond.
Keep the policy, closing documents, correspondence, photographs, surveys and notices received. A registered lien, suspected fraud or boundary demand can require prompt action; see common approaches to a title problem.
Title insurance Ontario FAQ
Where can I buy title insurance in Ontario?
Most buyers and refinancers arrange it through the real estate lawyer handling the transaction. The lawyer can obtain the information needed for the insurer, review lender requirements and explain the proposed policy before closing.
Can I buy title insurance after closing?
It may be available after closing in some circumstances, but insurers may impose different underwriting requirements, exceptions or limits. Ask a lawyer to review the property and obtain current insurer information before assuming post-closing coverage is available.
Is title insurance mandatory in Ontario?
No, an owner’s policy is generally not mandatory. A lender may require a lender’s policy as a condition of its mortgage instructions.
What is FCT?
FCT Insurance Company Ltd., also known as First Canadian Title, is a title insurer that offers title insurance products in Ontario. It is one of several insurers that may be considered depending on the transaction and available terms.
Do I need an owner’s policy if my lender has one?
A lender’s policy does not insure the homeowner’s interest. An owner’s policy is the policy to discuss if you want protection for your own covered loss, subject to its wording.
Is title insurance the same as house insurance?
No. House insurance addresses insured property damage and liability risks, while title insurance addresses specified legal title-related risks.
Speak with a Toronto real estate lawyer
Advice before closing can help you understand the title risks, lender requirements and policy terms that apply to your purchase, refinance or ownership change. Our real estate lawyers Toronto can review the transaction documents and explain the next legal steps.
Call 416-321-8766 or request a quote to discuss your matter with Zinati Kay.