A one-time insurance policy purchased at closing that protects the buyer (and their lender) against title defects, liens, encroachments, fraud, and other ownership issues that may be discovered after the purchase. Title insurance can cover problems that a title search might miss, such as forgery in the chain of title, municipal work orders, or zoning violations by a previous owner. Most lenders require it, and it has become standard practice in Ontario real estate transactions.
Why It Matters
Title insurance is a relatively inexpensive one-time cost (typically $250 to $500) that provides significant protection against potentially catastrophic title problems. It can also eliminate the need for an up-to-date survey, saving you that additional cost. In Ontario, title fraud is a real concern, and title insurance is one of the best safeguards available.
Real-World Example
A couple purchases a detached home in Markham for $1.1 million and pays $350 for a title insurance policy at closing. Two years later, a contractor who worked on the home before the sale registers a $22,000 construction lien, claiming the previous owner never paid for a kitchen renovation. Without title insurance, the couple would need to pay the lien or hire a lawyer to dispute it. With the policy, the title insurer pays the claim directly, saving the couple thousands in legal fees and the lien amount itself.
Ontario & GTA Context
Title insurance is standard practice in Ontario real estate transactions, and most lenders require it as a condition of the mortgage. Policies are issued by companies like FCT, Stewart Title, and Chicago Title. The one-time premium typically ranges from $250 to $500 for residential properties. In Ontario, title insurance can also cover defects that a survey would reveal, which is why many buyers now skip the expense of obtaining a new survey (which can cost $1,500 to $3,000).
How It Works in Practice
Your lawyer will arrange title insurance as part of the closing process. There are two types: a lender's policy (required by the bank) and an owner's policy (optional but strongly recommended). The owner's policy protects your equity in the home, not just the lender's mortgage. Ask your lawyer to explain what the policy covers and any exclusions that apply.
Common Questions
How much does title insurance cost in Ontario?▾
Do I need both title insurance and a survey?▾
What does title insurance cover?▾
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