What Does Title Insurance Cover?

What Does Title Insurance Cover?

Louis Cyr
Title insurance covers your title or, in other words, the interest that you own in your property. It guarantees the legal document that proves that you are the property owner and protects you from several risks associated with your property and the title itself. In this article, we list everything that is covered under this type of insurance, including document fraud and falsification, encroachment issues, work that does not comply with municipal by-laws, and much more. 
When you purchase your policy, you are covered for title insurance. This amount is payable in a single instalment and protects you for as long as you are the homeowner. So, it’s good for life. This insurance protects you against several risks that a notary’s attestation on a title may not cover.

Title Risk Coverage

There are many types of title risks covered by this insurance. Here are some examples:

Fraud and Falsification

This risk includes identity theft and property ownership impersonation.
Fraud entails intentional, voluntary deception used to harm another person or to take their money or property in an illegal manner.
In the case of real estate fraud, the individual steals an owner’s identity and then uses it to impersonate the owner. In this way, the fraudulent party may steal the property title, sell it, or obtain a mortgage or other property on behalf of the real owner.

Encroachment in an Easement on a Neighboring Property

The term encroachment refers to a structure (or a portion thereof) that was built on a parcel of land that does not belong to the owner. In the event of such a scenario, you may be asked to purchase the parcel of land, to pay an amount as compensation for the temporary loss of its use, remove the structure that is encroaching on the neighbouring lot or easement and even go so far as to request the demolition of the part of the structure encroaching on the neighboring property. These negotiations do not come free of charge. In the event that there is considerable encroachment that causes serious harm, the matter may go before the courts. This is where title insurance can be very helpful.
In addition, when we say easements, we are referring the legal right to use a parcel of land that does not belong to us.  Several types of easements exist, including easements of passage that allow owners to pass through adjacent land to access to their property, along with encroachment easements that allow owners to legally occupy a parcel of land that does not belong to them.

Non-Compliance with Municipal By-laws

For example:
  • A construction that exceeds the maximum allowable height
  • A house built too close to the property line
  • A triplex built in an area where only single-family homes are permitted
  • Construction completed without a permit

Municipal and School Tax arrears

This occurs when the former owner of a property failed to pay municipal or school taxes. As the new owner, you may be required to settle these claims.  

A Third-Party Claiming Property Rights

If the neighbour believes that their property line is located on your property, he or she may claim rights to your property and cause you a lot of trouble.  Title insurance protects your property as it was purchased, and includes all land delineated by the cadastral description included in your deed of sale. 
If this were to happen, your title insurer would build a case to defend your interests. This insurance even goes so far as to pay for legal fees incurred to represent you. 

33 Title Risks Covered!

In total, over 33 property title risks can be covered under title insurance. These 33 risks are covered for life, for an amount that costs less than a two-hour consultation with a lawyer. Think about it! This insurance may save you significant fees.

If you would like to find out how much your title insurance premium would cost, it’s easy. Try our online Abri premium calculator now.

You will be surprised how little it costs to protect your biggest investment!

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