FAQs - Home Settlement Centre

Frequently Asked Questions

Title insurance is a form of indemnity insurance that protects lenders and homebuyers from financial loss sustained from defects in a title to a property. The most common type of title insurance is lender’s title insurance, which the borrower purchases to protect the lender. The other type is owner’s title insurance, which is often paid for by the seller to protect the buyer’s equity in the property.

(From an article at Investopedia.com)

Having no title insurance exposes transacting parties to significant risk in the event a title defect is present. Consider a homebuyer searching for the house of their dreams only to find, after closing, unpaid property taxes from the prior owner. Without title insurance, the financial burden of this claim for back taxes rests solely with the buyer. With title insurance, the coverage protects the buyer for as long as they own—or have an interest in—the property. Similarly, the lender’s title insurance covers banks and other mortgage lenders from unrecorded liens, unrecorded access rights, and other defects.

(From an article at Investopedia.com)

It should not affect your property in any way if you must file a claim. If you believe you may need to file a claim, contact your title insurer or the agent who issued your policy. Title insurance includes coverage for legal expenses which may be necessary to investigate, litigate, or settle an adverse claim.

The cost of title insurance varies, mainly depending on the value of the property. Remember, you only pay for the coverage once, then the coverage continues for as long as you have an interest in the covered property. Contact us today and we will help you evaluate your needs so you can understand the costs. 

The lender’s policy covers only the amount of the loan, which is usually not the full property value. In the event of an adverse claim, the lender would ordinarily not be concerned unless its loan became non-performing and the claim threatened the lender’s ability to foreclose and recover its principal and interest. And, in the event of a claim there is no provision for payment of legal expenses for an uninsured party. When a loan policy is being issued, the small additional expense of an owner’s policy is a bargain.

Mostly, no. Most of the changes involve how and when information is provided by the lender to the borrower. Our role is affected in that much of the information the lender uses for the GFE originates with us. The initial information that the realtor or lender need to provide us remains much the same though.