Buying a home often involves a stack of documents, unexpected costs, and legal jargon. When title insurance is mentioned, some dismiss it as an unnecessary expense, but that assumption can be costly.

Here’s the truth: title insurance isn’t a sneaky legal upcharge.  It’s a practical, protective tool that can keep you from losing money (and your sanity) over title-related surprises.

Not a Scam – Here’s What It Actually Is.

Title insurance protects property owners and lenders from financial loss due to defects in a property’s title.

It can help cover the cost of resolving a variety of issues that may arise after you purchase a property, including:

• Unknown Title Defects: Issues with the property’s title that may not have been identified during the initial title search, such as an old lien or an error in public records.
• Fraud: Unauthorized activity affecting the title of your property, such as the registration of a fraudulent mortgage or transfer of ownership without your knowledge.
• Survey Errors: Discrepancies in property boundaries that result in legal disputes with neighbors.
• Encroachments: Situations where a structure (like a fence or shed) crosses over into a neighbouring property, or vice versa.
• Unpermitted Work: Renovations or additions, completed by a previous owner, without the necessary permits that may require removal or remediation after purchase.

Most lenders require title insurance to protect their own interests in the property, but this does not protect you, the property owner. To protect yourself, you need to ensure you’re getting an owner policy in addition to any lender-required coverage.

One-Time Premium, Long Term Coverage

Unlike other types of insurance that require ongoing payments, title insurance is typically paid as a one-time premium at the time of purchase. This makes it a relatively low-cost investment for the protection it provides.

Conclusion: Is Title Insurance Worth It?

For most property owners in BC, title insurance is a worthwhile investment. While the risk of title defects may seem low, problems like fraud, survey errors, or undisclosed encroachments can surface unexpectedly and resolving them can be expensive and time-consuming. Title insurance offers relatively inexpensive protection against the financial consequences of title-related issues, helping to minimize disruption, avoid unexpected expenses, and give you peace of mind.

If you’re buying a property in BC, asking about title insurance is a small step that can make a big difference. Speak to your real estate lawyer or notary to ensure you’re protected

This article is intended for general informational purposes only and does not constitute legal advice. Title insurance coverage can vary depending on the provider and the specific terms of your policy. Always consult with a qualified real estate lawyer to assess whether title insurance is appropriate for your situation and to understand the scope of coverage available to you.