What is title insurance and do I need it?

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At first glance Title insurance might not seem like something you need to purchase. After all, you’ve thoroughly investigated the property you want to buy. You have engaged the necessary professionals to do surveys and inspections as recommended and required, and you’ve consulted a solicitor. But this may not be enough to protect you from a future problem or risk associated with your Title. Title insurance protects you from those legal issues that might not have come to light during the buyers’ period of due diligence.

What Does Title Insurance Protect a Property Buyer From?

There are many scenarios that Title insurance can protect an unsuspecting buyer from. And considering that the cost of addressing any of the following legal issues can be quite expensive, the investment in Title insurance can pay off very quickly. Some of the legal concerns that are protected by Title insurance include;

  • Any type of building or renovations on the property or to the property that were done without the proper permits or authorizations
  • Any claim of ownership by another
  • Outstanding unpaid taxes that accumulated prior to your purchase that are due and owing
  • The misidentification of property lines that could cause you to lose a portion of your property
  • A structure built on your property without your knowledge
  • A lien against the property which was placed on the property due to a debt held by a previous owner
  • The violation of an existing zoning or planning law
  • A finding that you cannot inhabit your property
  • Fraudulent or forged documents related to the home

Many of these possible legal issues are costly to cure. With Title insurance a homeowner receives assistance in handling the cost of clearing up any of these types of violations and/or hindrances to the enjoyment of their property.

What Is Not Covered by Title Insurance?

Of course, not all impediments to the use and enjoyment of your property are covered by Title insurance. It is important to know the types of legal issues that are not covered by Title insurance. These issues can include:

  • Any defect or the building of any structure that occurs after the home is purchased and is the result of the actions of you, as the owner.
  • Any violation you cause to occur as a result of not abiding by current or new zoning laws or regulations.
  • Doing renovations or building new structures sans the necessary and appropriate permits.
  • Title claims on Native lands.
  • Contamination of the property that occurs as a result of an action that is subsequent to your purchase.

Therefore, when purchasing Title insurance, it is important to sit down with your policy writer and have the covered and non-covered items/issues identified and discussed in depth. If you are unsure about whether a concern of yours is covered or not covered, it is imperative you ask a professional to investigate the answer to your question.

What Is the Cost of Title Insurance?

The answer to this question is best illustrated using a mathematical formula/example. Let’s say you purchase a home for $500,000.00 and a Title insurance policy costs you $450.00. This means that for only 0.09% of the purchase price of your home, you can be fully protected. This is a relatively small sum of money for peace of mind.


In the event that you find yourself in need of assistance, please contact the law offices of Owen Hodge Lawyers. At Owen Hodge, we are always happy to assist clients in understanding the full ramifications of any and all of your legal needs. Please feel free to call us at your earliest convenience to schedule a consultation at 1800 770 780.



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