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Should I take out title insurance or not?

As you might expect, buying a home is one of the biggest financial commitments you will make in your life. And buying a home often involves title insurance. This type of insurance can protect you as a buyer and as its current owner. 
 
In this article, we will define what title insurance is and give you an overview of the risks covered by it. Finally, we will help you assess whether you really need this type of insurance or not. 
 
What is title insurance?
 
Primarily, title insurance protects against losses related to a real estate title situation. This insurance is available for both commercial and residential properties, for both purchase and refinance transactions.
 
However, title insurance can also become an insurance policy in which the objective is to compensate the insured for damages up to the amount of the insurance coverage.
 
Of the most common types of title insurance, the one that a homeowner can purchase at the time of buying a property is certainly the most common. This insurance provides protection approximating the market value of a property at the time it was purchased by the owner. It is important to note that title insurance for homeowners is not mandatory.
 
What risks are covered by title insurance?
 
As explained in the previous section, title insurance can also cover other situations that may affect the right to use and occupy a property and potentially cause financial losses.
 
Below is a list of problematic situations in which title insurance could be especially useful:
 
  • Defects in property titles
  • Non-compliance with municipal regulations
  • Encroachment on a neighbouring lot
  • Fraud, forgery or identity theft
  • Occurrence of charges against the property between the signing of the deeds and their publication in the land register
  • Debts of the previous owner secured by the building, utility bills, property taxes or unpaid condominium fees
  • Mortgages related to work prior to the date of insurance
  • The existence of unknown easements
  • Errors in survey plans
  • Irregularities in a certificate of location
  • Errors that occurred during the search and review of ownership titles
 
Title insurance also covers legal fees and other costs associated with a claim to clarify title. The reimbursement of these charges is in addition to the amount of the benefit that the insurer agrees to pay when there is a covered risk that cannot be corrected in any other way. 
 
And in the event of damage covered by a title insurance policy, the insured person does not usually have to pay a deductible.

When can you take out title insurance?
 
Title insurance can be taken out at any time, although it is more common when buying a property or renewing a mortgage. Be aware that title insurance remains in effect as long as you own the property, and if the insurance protects the lender, it remains in effect as long as you have a mortgage with them.
 
Do you really need title insurance?
 
Title insurance is not a requirement across Canada. However, it is strongly recommended that you protect yourself as an existing buyer or owner. To make the right decision, we recommend that you discuss the benefits of acquiring title insurance with your notary, mortgage professional or insurance broker. Once you have all the information, you will be able to make an informed decision based on your specific needs.
 
And who can sell you title insurance?
 
Damage insurance brokers are the only representatives authorized to sell you title insurance. However, a notary or even a lawyer can represent you with insurers if you mandate them and if they are not paid by the insurer itself to do so.
 
Rest assured that Mortgage Planners advisors are able to direct you to qualified professionals who will be able to advise you on the purchase of title insurance.
 

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RATES OF

2024-03-28 00:00:00

TERMS BANKS MORTGAGE PLANNERS
6 months Fixed 7.94% 7.55%
1 Year Fixed 7.89% 6.79%
2 Years Fixed 7.49% 6.14%
3 Years Fixed 7.14% 5.09%
4 Years Fixed 6.99% 4.94%
5 Years Fixed 6.84% 4.79%
5 years Variable 7.65% 6.25%
Refinance Fixed or variable 10.40% 5.09%
3 year closed Variable 8.60% 7.20%
7 Years Fixed 7.10% 4.94%
10 Years Fixed 7.49% 5.79%
HELOC 8.20% 7.70%

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