- What is title insurance?
It is an insurance policy that provides an indemnity against loss or damage for many covered title risks relating to real property, including coverage in the event someone else claims an ownership interest in the insured property or in the event that the priority and enforceability of a lender’s mortgage on title is challenged.
Title insurance provides coverage against title defects in existence at the time of closing, but which are not known to the insured at that time. It also provides coverage against losses resulting from many forms of title fraud.
It is widely used due to its comprehensive coverage and to save costs and time on real estate closings.
- Who can benefit from title insurance?
- home purchasers
- existing home owners
- residential and commercial lenders
- commercial property buyers
- What types of properties and mortgages does title insurance apply to?
Subject to meeting underwriting criteria, title insurance is available for both residential and commercial properties. Policies may be obtained for purchasers and lenders. The policy coverage offered varies between residential and commercial properties.
- Where is title insurance available in Canada?
Title insurance is available in all provinces and territories across Canada.
- How is title insurance obtained?
Title insurance policies are obtained via a lawyer / notary. The lawyer / notary completes the due diligence searches required to obtain a policy and contacts the title insurer to arrange for the policy.
- Is there an annual premium?
Title insurance is available for a one-time premium. The premium is based upon the purchase price (for an owner policy) and the registered mortgage amount (for a lender policy).
For owners, the policy coverage lasts for as long as the owner retains an ownership interest in the property and for lenders for as long as the insured mortgage is outstanding.
In certain circumstances, owner policy coverage continues to apply even after the original insured no longer has an interest, including situations where there is a transfer of title in favour of spouse or child who receives title for nominal consideration. For lender policies coverage continues in favour of assignees of the insured mortgage.
- What does title insurance cover?
Title insurance provides coverage for title risks existing as of the policy date, but are unknown to the insured at that time. Residential policies have some post policy date coverage such as for post policy forgery of an instrument whereby someone claims to have an ownership interest in the property. The policy date is the registration date of the deed (owner policy) and the registration date of the mortgage (lender policy.)
For Homeowners – Residential Gold Owner Policy
- Liens or encumbrances on title
- Tax arrears
- work orders
- Other parties owning an interest in a title
- Many forms of title fraud
- Encroachments onto an adjoining property, other than fences and boundary walls
- Lack of a legal right of pedestrian and vehicular access to and from the Land
- Violations of municipal zoning by-laws
- Unmarketability of the title to the property
- Setback violations
- Legal fees associated with a covered title risk as per the duty to defend contained within the policy
- Types of residential properties that may be insured include: condominiums, cooperatives, cottages, leased land and vacant land
For Lenders
- The invalidity or unenforceability of the insured mortgage upon the title
- The priority of any lien or encumbrance over the insured mortgage
- Unmarketability of the title
- Lack of a legal right of pedestrian and vehicular access to and from the Land
- Legal fees associated with a covered title risk as per the duty to defend contained within the policy
For Commercial Properties
- Liens or encumbrances on the title
- Lack of legal access to the property
- Unmarketability of title
- Invalidity or unenforceability of the insured mortgage on title
- Legal fees associated with a covered title risk as per the duty to defend contained within the policy
- Types of commercial properties that may be insured include: business centres, golf courses, hotels, office towers and resorts
- What is title fraud?
Title fraud involves illegally using a property’s title to obtain mortgage funds. The fraud can be committed through a number of methods including a fraudulent transfer of ownership with forged documents, or an impersonation of the owner to obtain financing.
Title insurance provides protection against loss or damage incurred by owners and lenders in many title fraud situations.
For residential policies, homeowners are protected for losses arising from fraud, forgery, duress, incapacity or impersonation, and lenders are protected against losses arising from forgery after the date of policy of any assignment, release, discharge (partial or full), postponement or modification of the insured mortgage.
Additionally, the coverage provision in the owner policy with respect to someone else owning an interest in title may apply in circumstance where an innocent purchaser purchases a property that was sold fraudulently. For lenders, the provision with respect to the invalidity of the mortgage upon title may also apply.
For commercial policies, there is no coverage for title fraud occurring after the policy date. However, the provision in the commercial owner policy with respect to someone else owning an interest in title may apply in circumstance where an innocent purchaser purchases a property that was sold fraudulently.
For commercial lenders, the provision with respect to the invalidity of the mortgage upon title may apply where the insured mortgage was fraudulently registered on title.
- What are some of the Benefits of a Stewart Title Policy?
Gap coverage: Provided Stewart’s underwriting requirements are met, a Stewart policy will provide coverage for the lender and homeowner for the gap between closing and document registration for those provinces where a registration gap exists. Gap coverage may also be available in other provinces where no registration gap exists where due to unforeseen circumstances registration cannot take place until the day following closing.
Standard coverage: Lenders receive coverage that is recognized worldwide so as to make commercial and residential mortgage portfolios more marketable.
Defence of title: All of Stewart’s policies contain a duty to defend title in the event that court action is taken to challenge an insured’s title where such court action is based on a covered title risk. Stewart can end that duty to defend by paying out the claim.
Expert advice: Stewart Title values the role and advice provided by a lawyer / notary during the real estate process and all policies are issued through their Canadian network of real estate lawyers / notaries.
Efficient claims handling: No deductible and no-fault claims.
Cost effective: A single premium covers the insured owner of the property until ownership changes. In certain circumstances the policy coverage continues after the insured owner no longer has as interest, such as nominal consideration transfers to spouses or children.
By obtaining a title insurance policy, there is often the ability to reduce the number of searches required to complete the closing of a real estate transaction. Additionally, the obtaining of title insurance usually will satisfy the lender’s survey requirements, thus saving the cost of obtaining a new survey.
Streamlined ordering: The policy issuing process and ability to order online make ordering from Stewart simple and fast.
Peace of mind: Stewart Title Guaranty Company stands proudly as one of the largest title insurers in the world, with more than a century of experience protecting homeowners and lenders.
- How are claims made?
Claims are made in writing to Stewart Title and the information required varies depending on the type of claim. Homeowners or lenders provide in writing that they have suffered a loss as a result of a defect covered by the policy. One of Stewart Title’s claims associates will then propose the method best suited to resolve the claim.
There is no deductible, and a title policy also provides cover for the costs, lawyer’s / notary’s fees and expenses incurred in defending title against a covered claim.
View some of our claims stories.
This website is intended to provide information that is of a general nature. Please refer to the policy for full coverage details. Sample policies are available upon request.