1. What is “Title”?:- The word “title” is a legal term that means you have legal ownership of property. You obtain title to property when the owner signs the deed (transfer document) over to you. Title is then registered in the government’s land registration system.
2. What is Title Insurance? Title insurance is an insurance policy that protects residential or commercial property owners and their lenders against losses related to the property’s title or ownership.
3. Do I Really Need Title Insurance? Title insurance is not a mandatory requirement in Ontario. The decision on whether or not you should purchase title insurance should be discussed with your lawyer, title insurance company or insurance agent/broker, Real Estate Broker, to fully understand what type of protection title insurance can provide you, and to determine if other options exist. Once you get all the facts, you can make an informed decision based on your specific situation and needs. It is important to keep in mind that title insurance does not replace legal advice when purchasing property.
Your title insurance policy will protect you as long as you own your property, and will cover losses up to the maximum coverage set out in the policy. It may also cover most legal expenses related to restoring your property’s title.
5. What is “Title Fraud”? Title fraud (or real estate title fraud) is a form of real estate fraud that harms individual homeowners and their lenders. Title fraud typically involves a fraudster using stolen personal information, or forged documents to transfer your home's title to him/herself (or an accomplice), without your knowledge. The fraudster then gets a mortgage on your home and disappears with the money.
If you are a victim of title fraud, you may be able to receive compensation for your losses if you submit a claim through the government's Land Titles Assurance Fund (LTAF). For more information on the Land Titles Assurance Fund visit Ministry of Government and Consumer Services.
6. What Does Title Insurance Not Cover? When purchasing title insurance, it is important to read the policy and ask questions to be aware of the coverage that is provided. You also need to be aware of possible exclusions, which may include:
You need to carefully review your title insurance policy, as it may include additional exclusions and exceptions that are specific to your property.
Title insurance does not provide compensation for non-title related issues. It is not a home warranty or home insurance policy, and will not provide compensation for:
Refer to your title insurance policy for a full list of exclusions, restrictions, and terms and conditions.
7. Do I Need Extended Title Insurance Coverage? For an additional fee, some title insurance companies may also offer you protection from additional risks that are not covered by a standard title insurance policy, such as identity theft and certain known title defects. Speak to your lawyer, title insurance company, or insurance agent/broker to determine if you require extended or additional title insurance coverage. They can compare several different title insurance products and recommend the product that would best meet your needs.
You can purchase title insurance for both residential and commercial properties. Types of residential title insurance include:
Types of commercial title insurance include:
Commercial title insurance policies can insure:
12. When is residential title insurance normally purchased? Residential title insurance is usually purchased when you buy your home. However, you can also purchase residential title insurance anytime after you purchase your home.
Note - Title insurance policies for existing homeowners are slightly different than policies that are obtained at the time a property is purchased.
13. How much does it cost? The cost of residential title insurance varies based on the value of your property, and the insurance company you choose. You will need to pay a one-time fee, called a premium.
14. 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.
15. Where can it be purchased? You can purchase residential title insurance through your lawyer or title insurance company, or you can contact an insurance agent/broker. For a list of insurance companies who are licensed to sell title insurance in Ontario, visit the Financial Services Commission of Ontario's (FSCO) click on Licensing & Registration, and select Licensed Insurance Companies in Ontario.
It is important to know that all lawyers practicing real estate law in Ontario are required to carry professional liability insurance. Your lawyer's professional liability insurance may provide coverage for title-related issues that relate to the services your lawyer provides in the real estate transaction.
A lawyer will provide you legal advice in order to help you make an informed decision about title insurance and other aspects of the transaction. The title insurance provisions under Rules of Professional Conduct Rule 2.02 ensure that lawyers meet their obligations. These rules are available on the Law Society of Upper Canada's website under Rules of Professional Conduct.
Since title insurance policies contain a lot of legal terminology, make sure you ask your lawyer or title insurance company questions about anything that you do not understand.
Title insurance companies and insurance agents/brokers should meet best practice standards that include:
Keep in mind that you are the customer and can choose any one of the title insurance companies that you think would best meet your needs.
18. If You Have a Complaint If you are not satisfied with how your claim is being handled, there are steps you can take. Improved measures have been put in place to help consumers get their insurance complaints resolved more quickly. Among them is the establishment of a Complaint Handling Protocol by all title insurance companies licensed to operate in Ontario. How the complaint process works varies from company to company. Your company representative (agent, broker, claims adjuster or customer service representative) will be able to provide you with specific information about the procedures to follow should you have a complaint.
In addition, each company has a Consumer Complaint Officer who oversees the complaint handling process. The Consumer Complaint Officer is an employee of your insurance company responsible for ensuring that your complaint is addressed. If you are unable to obtain information about the protocol from your company representative, or if you are having difficulty obtaining a response outlining your company's position, then you should contact your company's Consumer Complaint Officer.
For your convenience, the Financial Services Commission of Ontario (FSCO) has compiled a list of all company Consumer Complaint Officers. This list is available online at www.fsco.gov.on.ca. If you are unable to find the name of your company's Consumer Complaint Officer on this list, you should direct your complaint to the Chief Executive Officer of your insurance company, or contact FSCO at (416) 250-7250, Toll-free: 1-800-668-0128.
If you are unable to resolve your complaint with your insurance company, your company is obligated to provide you with a letter stating its final position on your complaint, as well as provide you with the name and details of an independent ombudsman organization that can review the complaint.
If you decide to write to the independent ombudsman organization referred to in your company's final position letter, make sure you describe your complaint and why you disagree with the company's position. Remember to include your company's letter and any documentation that relates to your complaint. Upon receipt of your unresolved complaint, a Complaint Officer at the independent ombudsman organization will review and respond to your complaint.
19. About FSCO FSCO is an arm's-length agency of Ontario's Ministry of Finance. In addition to insurance, FSCO regulates pension plans, credit unions, caisses populaires, mortgage brokers, loan and trust companies, and co-operatives.
FSCO works with consumers, industry stakeholders and investors to enhance public confidence in, and access to, a fair and efficient financial services industry in Ontario.
For more information on any of these sectors, visit website at www.fsco.gov.on.ca, or call our Contact Centre at: (416) 250-7250, Toll-free: 1-800-668-0128, TTY toll-free: 1-800-387-0584.
Remember to visit FSCO's website for more information on:
Contact address of FSCO:-
Details provided here are for information purposes only. Refer to the terms of your title insurance policy for the details of coverage and exclusions. Refer to your title insurance policy for full details on what legal expenses are covered. Should you have a question, please do not hesitate to contact me.