Title insurance is one of the lowest-cost, highest-value protections available to Canadian homebuyers. A single payment of $250–$500 at closing protects you against losses that could cost hundreds of thousands of dollars. Yet many buyers do not understand what it covers or how it works. This comprehensive guide covers every aspect of title insurance in Canada.
What title insurance is
| Feature | Details |
|---|---|
| Type | Insurance policy on the legal title (ownership) of real property |
| Premium | One-time payment at closing ($250–$500 for residential) |
| Ongoing cost | None — no annual premiums |
| Duration | Owner policy: as long as you own the property. Lender policy: as long as the mortgage exists |
| Providers | FCT (First Canadian Title), Stewart Title, Chicago Title, TitlePLUS (through Law Society programs) |
| Purchased through | Your real estate lawyer arranges it at closing |
Two types of policies
| Policy Type | Protects | Required? | Cost | Duration |
|---|---|---|---|---|
| Lender policy | The mortgage lender’s interest in the property | Yes — most lenders require it | $200–$400 | Life of the mortgage |
| Owner policy | You, the homeowner | Optional (but strongly recommended) | $50–$150 additional | As long as you own the property |
Why you need both
| Scenario | Lender Policy Only | Owner + Lender Policy |
|---|---|---|
| Title fraud discovered | Lender is made whole — you are not | Both you and the lender are covered |
| Encroachment requires removal of structure | Lender’s security protected — you pay the costs | Insurance covers your costs |
| Zoning violation prevents planned renovation | Not the lender’s problem — your loss | Insurance covers your loss |
| Missing lien surfaces after purchase | Lender has priority — you deal with it | Insurance pays to resolve the lien |
Complete coverage comparison
What title insurance covers
| Risk | Coverage | Example |
|---|---|---|
| Title fraud and forgery | Yes | Someone forges your signature to sell or mortgage your home |
| Existing liens or charges | Yes | Previous owner had a CRA lien, contractor’s lien, or unpaid mortgage |
| Encroachment | Yes | Your deck extends onto the neighbour’s property (or vice versa) |
| Building permit violations | Yes | Previous owner finished basement without permits — city orders removal |
| Zoning non-compliance | Yes | Property use violates current zoning (e.g., home office in residential zone) |
| Survey/boundary defects | Yes | Property boundaries differ from what was represented |
| Errors in public records | Yes | Mistake in the land titles office records |
| Missing or undisclosed heirs | Yes | An heir of a previous owner claims partial ownership |
| Easements not disclosed | Yes | Utility company has a right-of-way across your yard not shown on title |
| Property tax arrears | Yes | Previous owner left unpaid property taxes that become your liability |
| Municipal work orders | Yes | Outstanding city work orders (repair sidewalk, remove tree, etc.) |
| Gap coverage | Yes | Issues that arise between closing and title registration (registration gap) |
| Condo status certificate errors | Yes | Inaccurate information in the status certificate about fees or special assessments |
What title insurance does NOT cover
| Not Covered | Why |
|---|---|
| Known defects (disclosed before purchase) | You accepted the risk by buying |
| Aboriginal/Indigenous land claims | Generally excluded |
| Environmental contamination | Separate environmental insurance needed |
| Physical condition of the home | That is what a home inspection is for |
| Future changes in zoning | Only existing zoning issues are covered |
| Builder warranty defects (new construction) | Covered by Tarion or provincial new home warranty |
| Normal wear and tear | Not an insurance risk |
Cost breakdown by province and scenario
| Scenario | Lender Policy | Owner Policy | Combined | Total |
|---|---|---|---|---|
| $400,000 condo | $200–$300 | $50–$100 | — | $250–$400 |
| $600,000 detached house | $250–$350 | $75–$125 | — | $325–$475 |
| $1,000,000 property | $300–$450 | $100–$175 | — | $400–$625 |
| Refinancing (lender policy only) | $250–$400 | N/A | — | $250–$400 |
Per closing, title insurance costs less than one month of property tax in most cities.
Title insurance vs property survey/real property report
| Feature | Title Insurance | Property Survey / RPR |
|---|---|---|
| Cost | $250–$500 (one-time) | $500–$3,000 (one-time) |
| What you get | Financial protection against title defects | Physical map of property boundaries and structures |
| Identifies encroachments? | No — but covers the financial loss | Yes — shows exactly where they are |
| Shows property lines? | No | Yes |
| Required by most lenders? | Yes (lender policy) | Depends — some lenders accept title insurance in lieu of survey |
| Useful for building fences/structures? | No | Yes |
| Ongoing protection? | Yes — as long as you own the property | No — a snapshot in time |
Do you need both?
| Situation | Recommendation |
|---|---|
| Standard residential purchase | Title insurance is sufficient for most buyers |
| Planning to build a fence, addition, or pool | Get a survey AND title insurance |
| Rural property with unclear boundaries | Get a survey AND title insurance |
| New subdivision with builder survey | Title insurance may be sufficient |
| Lender requires one or the other | Ask which they accept — most accept title insurance |
The claims process
How to file a title insurance claim
| Step | Action |
|---|---|
| 1 | Contact your title insurance company (phone number on your policy) |
| 2 | Describe the issue — they assign a claims adjuster |
| 3 | Provide documentation (purchase agreement, title search, survey if available) |
| 4 | The insurer investigates the claim |
| 5 | If covered, the insurer either resolves the problem (pays legal costs, settles the lien) or compensates you financially |
Common claim scenarios
| Claim | What Happens | Typical Resolution |
|---|---|---|
| Contractor lien from previous owner | Previous owner’s unpaid contractor files a lien | Insurer pays to discharge the lien |
| Neighbour claims your fence is on their land | Boundary dispute arises | Insurer pays legal costs to resolve; compensates you if fence must be moved |
| City discovers unpermitted renovation | Orders you to bring to code or remove | Insurer covers costs of compliance |
| Title fraud discovered | Someone registered a forged transfer | Insurer pays legal costs to restore your title and covers losses |
| Property tax arrears surface after closing | Previous owner’s taxes create a lien | Insurer pays the tax arrears |
Claim timeline
| Stage | Typical Duration |
|---|---|
| Initial report | Immediate |
| Claims adjuster assigned | 1–5 business days |
| Investigation | 2–8 weeks |
| Resolution | 1–6 months (depends on complexity) |
| Title fraud claims | 3–12 months (complex legal process) |
Title insurance for condos
| Condo-Specific Coverage | Details |
|---|---|
| Status certificate errors | If the certificate was inaccurate about fees, special assessments, or reserve fund |
| Common element encroachments | If the condo’s common elements encroach on other properties |
| Condo lien from previous owner | Unpaid condo fees that create a lien |
| Zoning issues with the condo building | Non-compliance that affects your unit |
Condo buyers need title insurance too. The most common condo claim is status certificate errors — especially regarding special assessments that were not properly disclosed.
Title insurance for refinancing
| Situation | Insurance Needed? |
|---|---|
| Refinancing with the same lender | Lender may require new lender policy |
| Refinancing with a new lender | New lender will require a lender policy |
| Owner policy status | Your existing owner policy remains valid — no new one needed |
| Cost at refinancing | $250–$400 (lender policy only) |
Choosing a title insurer
| Insurer | Key Features |
|---|---|
| FCT (First Canadian Title) | Largest market share in Canada; broad coverage; widely used |
| Stewart Title | Global insurer; strong in commercial and residential |
| Chicago Title | Part of Fidelity National Financial; strong in Ontario |
| TitlePLUS | Offered through provincial law society programs; includes legal services coverage |
Your lawyer typically recommends and arranges title insurance. If you have a preference, ask your lawyer whether they work with that insurer.
Tips for buyers
| Tip | Details |
|---|---|
| Always get an owner policy | The additional $50–$150 is the best insurance value at closing |
| Keep your policy document | Store it with your important papers — you need it to file a claim |
| It does not replace a home inspection | Title insurance covers title problems, not physical defects |
| Ask about enhanced coverage | Some policies offer additional protection (identity theft, forced removal of structure, etc.) |
| It transfers if you inherit | If you inherit property, you may be covered under the previous owner’s policy |