What is Title Insurance?
First of all, “title” simply means “the right to own a piece of property.” Generally, there are two forms of title insurance. Lender’s title insurance, required by most banks, covers the amount of the mortgage and protects the lending institution from losses resulting from title defects.
Because lender’s insurance expires when the mortgage is repaid, you may benefit from the second form of title insurance known as an owner’s title policy. Owner’s title, or residential insurance, covers the purchase price of the home. This protection starts the day of the closing and lasts as long as you or your heirs retain an interest in the property.
What does it cover?
Title insurance protects you against anything that could hamper your ability to sell or mortgage your property. First, it can protect you against defects in your ownership papers. Second, it could offer protection against liens on your property, such as unpaid maintenance fees. Third, it can defend against fraud, negligence, and errors related to your purchase of the property. Finally, it can manage risks during the “gap period” between your purchase and the title registration. You can find more details about title insurance on the Insurance Bureau of Canada website.
Because everyone’s property is different, you should talk to your REALTOR® or insurance representative about your specific needs.
Cost of Insurance
As you might expect, the cost of insurance depends on the coverage you need and the specific details of your purchase. You can estimate costs with the FTC Quote Calculator.
Unlike other insurance premiums, your title insurance premium is paid only once, at the closing. You can save money by purchasing owner’s and lender’s protection simultaneously. After you’ve paid all the fees and signed the closing documents, you will receive a copy of all the papers and the insurance. More importantly, you’ll own the title and your property!
Talk to your REALTOR® if you’re interested in learning more about title insurance. Our team of professionals understand Fort McMurray real estate and the needs you might have as a property buyer. Contact us today!