Buying real estate often surfaces a lot of jargon—and “title insurance” is one of them. You might find yourself wondering: Do I need it? What risks does it cover? Let’s break it down in a clear, practical way.
Why Title Insurance Matters
At its core, title insurance safeguards buyers and lenders against unexpected legal or financial issues tied to a property’s title. Instead of covering the property itself, this policy protects ownership rights—things like hidden liens, errors in past transactions, or fraudulent claims. Because title insurance is typically a one-time premium (rather than a recurring cost), many buyers weigh whether it’s worth the investment.
For example, errors in past records, boundary disputes, or undeclared mortgages can surface long after closing. A solid title insurance policy can step in to handle those risks.
What Does Title Insurance Actually Cover?
Coverage varies by provider, location, and the nature of the property, but here are the most common risks that standard policies tend to include:
- Title defects and hidden liens: Undisclosed mortgages or encumbrances that were missed during the title search
- Survey and boundary discrepancies: Errors or mismatches in property lines, lot measurements, or surveys
- Encroachments: Cases where a neighbour’s structure or fence intrudes onto your lot
- Zoning or building-code violations: When a property doesn’t comply with local bylaws or was modified without permits
- Fraud or forgery: Situations where ownership was improperly transferred or documents falsified
Keep in mind: not every policy is created equal. Some add optional protections for issues like environmental liens or pre-existing violations. It’s wise to request a side-by-side comparison of available policies.
We recommend you consult your real estate lawyer or browse comparable policies from recognized insurers.
Is Title Insurance Compulsory in Ontario?
Short answer: No—but with important caveats. The Financial Services Regulatory Authority of Ontario states that title insurance is not a statutory requirement in this province. That said, purchasing such a policy is strongly encouraged and most real estate lawyers will advise and practice accordingly.
On the flip side, many lenders will insist on title insurance as a condition for approving your mortgage. So while the government doesn’t mandate it, your financing plan might. Be sure to verify whether your lender requires it.
Also, even when not required, most buyers opt for title insurance as added protection, especially in regions where title searches are complicated or historical records are incomplete.
How to Decide Whether You Need It
Here’s a helpful checklist to guide your decision:
- Talk to your lawyer or notary. Legal professionals familiar with Ontario real estate will help you evaluate risks.
- Ask your lender. If it’s already a borrowing condition, your choice is made for you.
- Compare insurers and policies. Look at what each offers, what is excluded, and how claims are handled.
- Assess the property’s history. Older homes, properties with complex subdivisions, or lots with unclear records may carry more hidden risk.
- Balance cost vs. peace of mind. Though it’s a one-time cost, the protection can pay for itself many times over in a worst-case scenario.
You can also explore third-party resources on title insurance basics.
Bottom Line
Title insurance is a protective shield—offered once, but capable of guarding against issues that could surface years down the road. While it isn’t legally required in Ontario, many lenders demand it. If the property has a complicated past or recordkeeping is spotty, opting in can save you headaches.
Partner with the Bernard Team
We're here to answer all your questions and connect you to trusted real estate lawyers who can guide you through the title insurance process and ensure a smooth closing. If you have questions about the buying process, we’d be happy to help.
Connect with the Bernard Team today to start the conversation.
