Alberta Title Insurance Policy
In Alberta, there is an insurance product that many people do not know about. When buying a home, there are a number of insurance products that come up. These include home fire insurance, CMHC default insurance, mortgage life insurance, content insurance for condos, etc.. Home owners/buyers also have a choice to purchase a homeowners’ title insurance policy. No requirement exists for purchasing title insurance for a homeowner in Alberta. This is meant to help you understand if you need or should otherwise get title insurance. Your real estate purchase lawyer can help you understand more.
Do I Need Title Insurance?
First of all, what exactly is title insurance and why is your lawyer asking if you want to purchase title insurance when you are signing documents to purchase your home? Title insurance is a type of insurance that a homeowner can purchase to protect against title fraud, building permit issues, Real Property Report issues, liens on title and many other potential issues. The reason your lawyer is asking you about this now is that you must purchase the policy through your lawyer and it is commonly less expensive to purchase at the time you first purchase your home as opposed to later on. That said, the ability exists to purchase title insurance at any time.
Title insurance is not like your house insurance or car insurance. You won’t get a renewal notice every year. Title insurance has a one-time fee and the policy covers the entire period of time that you own your home. The limit is that the all the values are set at the time you purchase. This means that the full value of the home is limited to the value at the time the title policy is purchased.
What Does Title Insurance Cover?
Title policies provide coverage for a variety of potential problems including, but not limited to:
- Someone else claiming an interest in your title
- Fraud, forgery and false impersonation affecting the validity of your title
- Existing liens against title including property tax arrears and municipal utility changes
- Violations of municipal zoning by-laws
- Many forms of encroachments onto the property or adjoining land
- Lack of legal access to the property
- Title fraud that occurs in the future
- Unmarketability of land due to adverse matters that an up-to-date Real Property Report would have revealed
Owner Vs Lender Title Insurance Policies
There are two types of title insurance policies for residential real estate. An owners policy protects the person or people who own the property. This means that the insured risks will protect the home owner. A lender title insurance policy only protects the the lender (mortgage company). Insurers only cover risks if there is a loss to the lender covered by an insured risk. The policy will only rectify things or payout enough to make the lender whole in terms of their loss. This type of policy, which some lenders require, offer no protection to the homeowner. The home owner will need to get an owners’ policy.
Should I Get Title Policy For My Existing Home?
If you have concerns regarding any of the above issues, you may want to consider purchasing a title policy for your existing home. It is important to note that a title insurance policy in Alberta will usually not cover existing defect that are known. Any such defects must be disclosed and then the insurance provider will determine if they will insure the home or not, carve out that defect or not insure the home at all.
How Much Does A Policy To Protect Your Title Cost?
The cost of the policy will depend on where you are buying, what you are buying and the value of the property. Normally, a home under $500,000 will cost about $200-$275. Remember that this is a one time fee. Your lawyer can obtain an exact quote for you prior to actually ordering the policy.
Which Companies Sell Title Insurance?
So do you need or want title insurance? That is a question that ultimately only you can decide. As with any type of insurance, there is usually a cost-benefit analysis that you will have to think about to make the decision. Insurance is a personal decision. If you have any questions about this type of protection, be sure to ask your lawyer or check out the following links for more information:
www.stewart.ca www.fct.ca www.chicagotitle.ca
How Do I Order A Policy?
You can order a policy by contacting your real estate lawyer. Most title insurance companies will not sell a policy directly to homeowners. At Kahane Law Office, at the time of your purchase or refinance, we will order a title policy, at your request. We do not require all our clients to purchase a policy. It is our belief that you should be given a choice as to what you spend your money on. We treat this as a disbursement, meaning that we just pass on the cost of the insurance product to you without adding in any additional fee to our office. Call 403-225-8810 or email today to contact us.