What the Heck is Title Insurance?

Title insurance is an insurance policy that protects you, the homeowner from problems related to the title to your home. Risks that are covered under title insurance include claims due to fraud (if person who sold it to you will be found guilt of fraud and therefore not a lawful owner of the property); work orders and liens (ex: if previous owner did not pay contractors); undischarged mortgages, zoning and setback non-compliance, survey irregularities, permit violations, fences, boundaries, tenancies, rights of way, certain easements and many others, but the most common one is probably utility bills unpaid by previous owner

      What Does Title Insurance Not Cover?

• Damages due to flooding, fire or sewer backup;
• General wear and tear of your home (e.g. replacing old windows, a leaky roof, or an old furnace)
• Theft (e.g. a burglar breaks into your home and steals your television); and
• Other losses or damages due to nontitle related issues.

     What are the Different Types of Title Insurance?     

     There are two main types of title insurance policies:

Owner’s policy – Protects the property owner from various title related losses that are listed in the insurance policy, for as long as the property is owned. An owner’s policy sets a maximum amount of coverage.

Lender’s policy – Protects the lender from losses in the event that the property’s mortgage is invalid or unenforceable. A lender’s policy usually provides coverage for the amount of the property’s mortgage.

        What type of properties can be covered?
Tile insurance is offered on all types of properties including single family residences, apartment buildings, mixed-use properties, agricultural properties, vacant land, warehouses, railways, office buildings, entertainment complexes, retail outlets, distribution centres and hotels. In fact, title insurance is even more important for commercial real estate transactions where typically the risks are greater and loan amounts larger.

      How long does the coverage last?

Residential title insurance coverage lasts as long as you own the property. Most residential title insurance policies extend coverage to your heirs through a will, to a spouse in the event of a divorce, or to children when the property is transferred from parents to children for nominal consideration.