Title insurance is a one-time insurance policy that protects property owners and their lenders against financial losses related to defects in a property's title or legal ownership. While title insurance is not legally required in Ontario, most mortgage lenders mandate a lender's policy as a condition of financing, making it a practical necessity for anyone purchasing with a mortgage.
Unlike home insurance, which covers future events such as fire or water damage, title insurance primarily addresses risks rooted in the past. It provides coverage after closing if problems surface that were not detected during the transaction. These can include unknown liens or encumbrances left by a previous owner, title fraud or forgery, encroachment and boundary disputes, zoning or building permit violations tied to existing structures, and errors in public records or land registration.
There are two types of policies. A lender's policy protects the mortgage lender if the title turns out to be defective. An owner's policy protects you, the buyer. Your real estate lawyer typically arranges both at closing. In Ontario, title insurance companies are licensed and overseen by the Financial Services Regulatory Authority of Ontario (FSRA), and Ontario lawyers are required to advise their clients about title insurance as an option.
The cost is a single premium paid at closing, with no ongoing payments. For residential properties, the premium generally ranges from $200 to $500, though it can be higher for properties in expensive markets or with more complex title histories. Condominiums tend to sit at the lower end of that range because their ownership documentation is relatively standardized. Coverage lasts as long as you own the property, and most policies extend protection to a spouse or heirs who inherit it.
Title insurance has largely replaced the need for an up-to-date land survey in Ontario real estate transactions, since it covers many of the same risks at a fraction of the cost. A new survey can run $1,500 to $3,000 or more. That said, title insurance does not tell you where your property lines actually are. If you plan to build a fence, add an extension, or make changes near a boundary, you may still want a survey.
Your real estate lawyer will walk you through the specifics of what a policy covers and what it excludes. Reviewing the policy carefully before closing is important, because exclusions vary between providers.
