Title insurance is part of almost every residential closing in Ontario, yet most buyers sign for it without a clear picture of what they are buying. It is worth understanding, because title insurance is a useful protection, not a cure-all.
What it is
Title insurance is a policy you pay for once, usually at closing, that protects against certain risks affecting your ownership of the property. Unlike home insurance, it does not cover the building itself; it covers your legal interest in the land.
Two policies, two different people protected
There are two types, and buyers often confuse them. An owner policy protects the buyer's interest and generally lasts as long as you own the home. A lender policy protects the lender, and only the lender — it does nothing for the buyer's interest. On a financed purchase both are often issued, but they are not the same thing and they do not protect the same person.
What it typically covers
Depending on the policy, title insurance can provide coverage for issues such as title fraud or forgery, certain liens or encumbrances that a search did not reveal, some survey and boundary problems, defects in prior registrations, and the short gap between closing and the moment your ownership is registered. For many buyers, the protection against title fraud is the most valuable feature.
What it does not do
Title insurance does not prevent fraud — it is a remedy after the fact. If someone forges documents and deals with your property, the policy may cover the legal costs and losses of restoring your title, but the fraud still happened and still has to be unwound. It also does not replace a proper title search: a search identifies visible problems before closing, while insurance covers certain risks a search might miss. And it generally does not cover known defects you accepted, environmental issues, or problems that arise after you buy.
The takeaway
Title insurance is valuable, but it works best alongside a careful title review, not instead of one. Before you close, make sure you understand which policy you are getting and what it actually covers.
This article is general information about Ontario real estate law and is not legal advice. For advice on your situation, speak with a lawyer.