What Is Title Insurance?
Title insurance is protection against loss arising from problems connected to the title to your property. Before you purchased your home, it may have gone through several ownership changes, and the land on which it stands went through many more. There may be a weak link at any point in that chain that could emerge to cause trouble. For example, someone along the way may have forged a signature in transferring title. Or there may be unpaid real estate taxes or other liens. Title insurance covers the insured party for claims and legal fees that arise out of such problems.
Do I have to Purchase Title Insurance?
Usually you do if you need a mortgage, because many mortgage lenders (i.e. banks/credit unions) require such protection for an amount equal to your loan. This insurance lasts until the loan is repaid. As with mortgage insurance, it protects the lender but you, as the borrower pay the premium, which is a single payment made upfront (this payment is usually between $175 – $450 depending on the amount of your mortgage and some other factors).
Does Title Insurance Do Anything For Me?
The required insurance protects the lender up to the amount of the mortgage, but it doesn’t protect your equity in the property. For that you need an owner’s title policy for the full value of the home. You have the option of adding the owner’s policy on to the lender’s policy for a small additional cost (usually around $50). You will see the charges incurred for your lender and owner policies in your statement of adjustments. We view this as very important protection for our clients and a small price for you to pay for your peace of mind.
For How Long Is the Property Owner Purchasing Title Insurance Covered?
Indefinitely. The owner’s protection lasts as long as the owner has an interest in the property.
This is provided as information ONLY; it should NOT be construed as legal advice. For more information on Wills & Estates and Real Estate matters and to discuss your specific circumstances, please contact Vanessa DeDominicis at [email protected] or on 250-869-1140. Vanessa practices in the area of Wills & Estates and Real Estate at Pushor Mitchell LLP in Kelowna and would be more than happy to assist you.
