Title insurance in British Columbia and its benefits
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You can never have enough insurance
When you purchase a home, you are granted a property title that legally proves you are its owner. Property titles also list any registered mortgages and/or liens, describe any easements and provide many other important details.
Title insurance is a legal form of assurance as to the state of a property’s title. It protects lenders and purchasers against loss or damage suffered due to fraud, survey errors, encroachment issues, existing undisclosed liens, as well as any other issues that prevent you from having clear ownership of your property.
For example, if your personal identity is compromised, title insurance will offer protection and cover the costs associated with defending and repairing your name, including reimbursement of lost wages for time spent away from work focusing on this process.
This insurance is also useful in situations where someone challenges your title. If a neighbour builds a fence that encroaches on your property, your title insurer will cover the legal costs of defense.
Another great benefit to title insurance is “building compliance” coverage. If you’ve purchased a home that was previously renovated without proper permits, and if the renovations are not in compliance with building code regulations, then the insurance will allow for compensation on any costs associated with correcting the issues.
Title insurance also protects against any errors your lawyer may have made during the buying process. In these situations, the insurance would cover any costs associated with rectifying the mistakes and any losses suffered, saving you from a potential lawsuit.
Most mortgage lenders in Canada will require that you purchase title insurance to cover the original mortgage amount. Generally, it’s around $250 (one-time fee) and is included in your closing costs. To insure your title for the full amount of your purchase price, you may also need to pay for buyer’s title insurance. However, it’s not uncommon to find lenders that provide joint buyer and lender coverage.
While there are many types of insurance to consider when buying a home, the process shouldn’t be difficult. Let’s work together.