Guide
Title Insurance
“ title insurance is relatively hassle-free if your client ever has to claim ” lawyer’s conduct or status,” says Leclair. “If the lawyer is negligent for some reason and you sue the lawyer, the lawyer’s insurance would indemnify you if you had a rightful claim. But that lawyer’s insurance has a cap on it. So if the lawyer had another client sue him, there may be no more insurance left because it’s all used up from previous clients. With this policy, it’s a direct guarantee and link to the homebuyer.” 8. An efficient no-fault claims process. Title insurance is relatively hassle-free if your client ever has to claim. “It’s a no-fault situation, which means the title insurer looks at the facts of the case, determines if the issue is covered by your policy and then
9 reasons why your client wants title insurance 1. Makes closings faster and more efficient. 2. Low one-time premium. 3. Saves more money. 4. Covers unknown title problems. 5. Title fraud coverage before or after the property purchase. 6. Duty to defend. 7. Covers lawyer negligence. 8. An efficient no-fault claims process. 9. Peace of mind.
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compensates the homeowner for the loss,” says Decker. “If you didn’t have title insurance and an issue arose, your client’s only option would be to sue the lawyer and prove negligence. In any case, if you have to go the route of suing somebody, that’s obviously a much more time-consuming and costly process.” 9. Peace of mind The biggest reason for your client to purchase title insurance is peace of mind. Since the policy covers such a wide range of potential issues, homebuyers can be assured if they landed in an unlucky situation—whether it was fraud or an unknown title defect—it won’t cost them anything extra. “Most people would rather not have the problem than have the right to claim under an insurance policy,” says Leclair. “Most people have fire insurance not because they want a fire—they never want to make a claim. They’d rather never have a fire. It’s the same thing for a title insurance policy.” In Ontario, more than 95 per cent of residential transactions are title insured. Outside of Ontario, depending where you are, it’s more or less but the percentages are growing very fast. In the 1990s, title insurance barely existed in Canada. Decker identifies three main reasons why it grew in popularity. The first is in 1997, the law society introduced a rule that required lawyers to discuss all protection options with clients, including title insurance. Prior to that, homebuyers simply had to rely on the lawyer’s opinion of whether there were any defects or suspicious activity on a property title. So the new rule propelled the idea of title insurance to the forefront. The second factor was at the same time, it became clear obtaining title insurance could save clients money, which always acts as an incentive. Finally, Decker recalls there was a prevalence of title fraud incidents, also spurring consumers on to learning how to protect their home interests. So as a mortgage broker, knowing as much about all aspects of your clients’ homes shows you care about them as people rather than a dollar sign. This builds a stronger relationship and increases the likelihood of referrals. Since title insurance is commonplace now in most provinces, your clients will be thrilled to learn all the benefits they’re receiving for such a low cost. CMP
Top: Karen Decker Bottom: Ray Leclair