People often misunderstand title insurance with home insurance. Your real estate lawyer might recommend you to get title insurance while you already have a home insurance and you might find yourself wondering if the title insurance is really worth getting. For starters, make sure you get the general information about guidelines concerning title insurance and not from your broker. The Real Estate Council of Ontario is not responsible for regulating real estate insurance.
The title insurance concerns the ownership of the properly. If you have title insurance, it will cover you against risks and losses that relate to your home's ownership. However, unlike home insurance, title insurance does not cover aspects such as general wear and tear of the house, fire damage and theft. Even though title insurance isn't a requirement in Ontario, real estate lawyers generally recommend it because of the protection it offers against different risks, such as title fraud from identity theft and forged documents. It also protects against any existing liens against the ownership like unpaid property taxes from previous homeowner. Moreover, encroachment issues, along with other title related concerns that influence your ability to mortgage, lease or sell your house are also protected against.
Make sure you go over the insurance policy details extensively with your real estate lawyer. You should consider getting yourself title insurance because for a one-time fee, you can easily avert various risks associated with the "title" of your property, for as long as you own the property. Since title insurance is not the same as home insurance, it will not cover title defects that you were aware of before purchasing the property, environmental hazards including soil contamination, indigenous land claims, issues that can only be found through inspection and zoning bylaw violations from changes you made to the property after you purchased it. Therefore, make sure you go over the terms and conditions of title insurance thoroughly.