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Title insurance is a one-time-premium policy purchased at closing that protects an owner or lender against financial loss from title defects, fraud, or survey and boundary problems discovered after the purchase closes.
A title insurance policy responds to problems a buyer typically can’t see before closing — an existing lien that wasn’t caught, fraud against a prior owner, an encroachment across a property line, or a survey issue that would otherwise require a new survey to resolve. It’s a common way to close a deal without ordering a fresh survey.
Most lenders require at least a lender’s title insurance policy as a condition of closing, and its cost is part of a file’s closing costs. A separate owner’s policy is optional but common, giving the buyer their own protection beyond what the lender’s policy covers.
Usually required by the lender: most Canadian lenders require a lender’s title insurance policy at closing, arranged as part of the deal’s closing costs.
Owner’s policy is optional but common: buyers can add a separate owner’s policy for their own protection, typically for a modest additional premium.
Works alongside a title search, not instead of it: a title search confirms current ownership and registered charges; title insurance covers risks a search can’t catch.
One-time cost: unlike mortgage default insurance, title insurance premiums are paid once at closing, not financed into the mortgage.
Definitions reflect Canadian federal and provincial rules as of the “Updated” date above. Not advice for any specific file.
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