Buying a home is one of the biggest investments you’ll ever make—emotionally and financially. Between mortgage paperwork, home inspections, arranging for insurance and moving logistics, it’s easy to miss some of the finer details. One of those? Title insurance.
While it may not be the most exciting part of the process, it’s an important layer of protection that can save homebuyers from serious (and expensive) surprises down the road. Most lawyers will advise their clients to purchase Title insurance when buying a home or other property and if they agree, their lawyer will look after that as part of the due diligence they do to complete the purchase on your behalf.
What is Title Insurance?
Title insurance is a one-time purchase that protects homeowners—and their lender—from certain types of property-related losses or legal claims that may arise after the purchase has closed.
My first experience with Title insurance was in 1992 when I moved to the U.S. as the result of a job relocation. Prior to that I had owed three homes and when purchasing them, Tittle insurance had never been mentioned as it did not appear in Canada until around 1991. By the late 1990’s and early 2000’s, Title insurance became more common in residential real estate transactions across Canada, particularly in Ontario, where it helped streamline closings and reduce the need for certain legal tasks, like a full opinion on title from a lawyer. So, while it’s a relatively recent addition to the Canadian real estate landscape compared to traditional practices, Title insurance is now a standard offering in most real estate transactions—especially in Ontario.
Unlike other types of insurance that protect against future events, title insurance protects you from things that may have already happened, but weren’t uncovered during the buying process.
What Does Title Insurance Cover?
Here’s what title insurance can typically help with, protecting your investment from hidden surprises:
✅ Title defects – Issues that weren’t discovered during the title search, like errors in public records, forged signatures, or missing heirs who may have a legal claim to the property.
✅ Outstanding liens or unpaid debts – If a previous owner left behind unpaid property taxes, utility bills, or contractor liens, Title insurance can cover the cost to resolve them.
✅ Encroachment or boundary issues – For example, if a neighbour’s fence, shed or other structure is accidentally built over your property line. I have found that in many cases, homeowners do not have a survey of their property and even when they do, the survey is outdated. It may be of their lot before the house was built. Often the house may be on the survey but not garage, deck or other structure that may have been added since moving in.
✅ Zoning or permit problems – If past renovations were done without proper permits and the municipality comes calling, Title insurance may offer protection.
✅ Fraud and forgery – This could include someone fraudulently selling a property they don’t actually own and we’ve all heard or read stories in the media about mortgage
How Does It Help Homebuyers?
Let’s say you’ve moved into your new home and a few months later, you receive a notice from the municipality saying there’s an outstanding lien on the property from the previous owner. Without Title insurance, you could be on the hook for that debt. With it? You’re likely covered.
This situation actually happened to me after I moved to the U.S. When I met with my lawyer to complete the purchase he advised me to take out Title insurance which I did. First they had to explain what Title insurance was as I had never heard of it in my prior home purchases in Canada. Several months after moving into my two year old home there was a knock on my door one evening, it was a sheriff looking for the previous owner. Upon learning I had recently bought the house he replied: “you’re off the hook then.” When inquiring as to the nature of his visit, I was advised that the original developer of the subdivision (not my home’s builder) had gone bankrupt and had not fully paid the company that had paved the streets and installed the sidewalks. Since the paving contractor was never going to get paid from the bankrupt developer, they decided to go after the homeowners. Some of my neighbours first became aware of this when they went to renew their mortgages and found that a lien had been put on their property. Upon learning there was no legal claim to be made against the homeowners, the case never went any further. However had it gone to court, my Title insurance would have covered my legal expenses and other costs saving me thousands of dollars.
In any real estate market and especially when homes can change hands quickly with short “closing dates,” Title insurance offers an extra layer of security. It can also speed up the closing process, especially when historical documentation is incomplete or when minor issues crop up when your lawyer does the Title search.
Do You Really Need It? How Much
In most cases, lenders will require their own policy (which protects their interest), but a homeowner’s title insurance policy is optional. Still, many Buyers upon learning what I have outlined herein choose it for peace of mind. It’s typically a one-time premium, and the coverage lasts as long as you own the home.
How Much Does Title Insurance Cost?
For a relatively low cost, Title insurance can protect you against high-cost problems and that kind of peace of mind is worth a lot. Title insurance premiums are based on the following:
🏷️ 1. Purchase Price of the Property
The higher the purchase price, the higher the premium. Title insurance is generally tiered based on property value, since the potential liability increases with more expensive properties.
📍 2. Type of Property
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Residential properties (like single-family homes, condos, or cottages) usually have lower premiums.
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Commercial or multi-unit properties will cost more due to increased complexity and risk.
Still Have Questions About Title Insurance?
🏦 3. Type of Policy
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Lender’s policy: Often required by your mortgage lender and protects their interest. Usually cheaper.
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Owner’s policy: Optional, but highly recommended—it protects you, the homeowner. This is where most buyers focus.
🔄 4. Whether It’s a Purchase or a Refinance
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For refinances, a new lender’s policy is often required, but it’s usually less expensive than a full purchase policy.
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Purchase policies (especially for new owners) tend to be higher because the liability is broader.
🗂️ 5. Province or Region
Costs can vary slightly depending on where the property is located. Ontario is one of the most active title insurance markets, and pricing is generally more competitive here.
💡 Typical Cost Range (for residential in Ontario)
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On a $500,000 home:
Title insurance might cost around $250–$500 (one-time fee).
For higher-end properties, it can go up into the $700–$1,000+ range.
As a local real estate Broker with decades of experience helping Buyers and Sellers in the Southern Georgian Bay area, I’m always happy to walk you through the finer details of a real estate transaction in this market—Title insurance included. Contact Me rcrouch@sothebysrealty.ca or on my Direct line anytime at 📞 705-443-1037.
Whether you’re buying your first home or your forever home, I’m here to help you make smart, informed decisions every step of the way.
NOTE: The author is a Broker, Market Value Appraiser-Residential with Sotheby’s International Realty Canada and a Past President (2008) of the One Point Association of REALTORS®.