Ottawa homebuyers are routinely offered title insurance as part of their closing package, often without much explanation of what it actually covers or whether it's genuinely necessary. The short answer: yes, virtually every real estate lawyer in Ontario recommends it, and the cost is modest enough that declining it is rarely wise.
What Title Insurance Covers
Title insurance in Canada is a one-time premium that provides protection against losses arising from title defects that exist at the time of purchase but aren't discovered until later. This includes: forged or fraudulent documents in the title chain, errors or omissions in the title search, survey issues (e.g., a fence or structure encroaching on a neighbour's property), outstanding liens or encumbrances that weren't found in the search, and municipal work orders or building permits that weren't closed.
In Ottawa, a city with significant older housing stock and a long property history, title issues do arise, particularly around unpermitted additions and encroachments that date back decades.
Owner's Policy vs. Lender's Policy
There are two types of title insurance: the lender's policy (which protects your mortgage lender's interest and is typically required by your bank) and the owner's policy (which protects you). Both are recommended. They are often purchased together for a combined one-time premium. On a $685,000 Ottawa property, combined owner-and-lender title insurance from providers like FCT or Stewart Title runs approximately $350 to $600.
What Title Insurance Does Not Cover
Title insurance is not home insurance. It does not cover physical damage to the property, environmental issues that weren't present at the time of purchase, matters that you were aware of when you bought, or zoning changes after your purchase. It also doesn't replace a survey. It insures against issues that a survey might reveal but doesn't commission one.
The Fraud Risk in Ontario
Ontario has seen documented cases of title fraud, where fraudsters impersonate owners, forge documents, and obtain new mortgages on properties they don't own. The real owner discovers the fraud months later when the fraudulent mortgage goes into default. Title insurance protects against this scenario, which can otherwise result in lengthy and expensive legal disputes.
Is a Survey Still Needed?
Traditionally, buyers required a survey of the property. Title insurance has largely replaced this requirement, and most Ottawa lenders will accept title insurance in lieu of a survey. However, if you're buying rural property, vacant land, or a property where boundaries are a known concern, a survey is still worthwhile.
The Bottom Line
At $350 to $600 for a one-time premium on a $685,000 purchase, title insurance is one of the best value-for-cost protections available to Ottawa buyers. It's not a product to decline in an attempt to trim closing costs. Your lawyer can arrange it as part of the closing process, simply confirm they're including an owner's policy, not just the lender's policy.
