P
EACE OF MIND WITH A SUITABLE TITLE INSURANCE POLICY John Rider, Senior Vice President, Retail and Commercial Title Insurance, Chicago Title Insurance Company, Canada
Title insurance is the cheapest and best
homeowner from. It covers matters such
insurance a borrower will ever buy. Period.
as fraud and forgery, survey issues, zoning,
Okay, I know that I am biased given I work
work orders and permit issues where the
for Chicago Title Insurance Company
municipality forces a homeowner to fix such
Canada, but a big part of why I work here
problems. It covers the policyholder if there
is that I believe in the product. I know all
are any actual challenges to the “title” or
the arguments about insurance and how
ownership of the property (or the validity
expensive it is and when one tries to make a
of a mortgage on the property in case of
claim there are issues. I get it. The industry
a lender policy) but it goes well beyond
doesn’t have the best reputation – although,
that to cover many other issues. So, what
on that front, I have to tell you the last two
happens if a client buys a house and their
times I dealt with other insurance companies
neighbour subsequently complains that the
(Car accident and Life insurance policy –
client’s garage is 3 feet on to her property?
not mine thankfully), the service and speed
Well title insurance looks at the issue, tries
was stellar. In any event, Title insurance is
to get the neighbor to be reasonable and
different. Title insurance is the cheapest
settle but if she refuses and wants to be
insurance you will ever buy because it is a
“that” nasty neighbor, we always hear about,
1 TIME PREMIUM. That’s right. You pay the
the title insurer will pay to have the garage
premium, which across Canada the average
moved or the offending portion moved off
is $400 for a homeowner (GTA is higher
of the neighbor’s property. Title insurers see
because values are much higher). One
all sorts of claims around building permits,
only pays that premium once to cover the
unpaid taxes, construction liens, and sadly
entire life of a mortgage (which includes any
and rapidly increasing fraud and forgery
assignments to another lender) or the length
where someone fraudulently discharges
of time one owns the property. So, if one
and/or places a new mortgage on title to a
buys a house today and owns it for 50 years,
property they don’t own. This causes a total
the coverage will still apply. Luckily for title
mess for the homeowners and the lenders
insurance companies, Canadians on average
involved and sorting out the mess can be
own their homes around 5 years, so we
very costly. The beauty of title insurance,
actually get to insure properties more
in this scenario, is that the title insurer pays
than once.
the legal fees to sort it out and if the lender
So, what is title insurance and what does it cover? Title insurance covers a homeowner for a myriad of issues relating to a property that home insurance can’t cover for and a lawyer/clerk/notary can’t protect a
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ultimately loses priority or the validity of its mortgage or property, title insurer pays you or the lender the loss without deducting the legal fees incurred to remedy the situation. While no one loves insurance, as one pays for it and usually doesn’t need it, its value is