What Is Title Insurance, and Do You Actually Need It in Ottawa?
If you’re buying a home in Ottawa, your to-do list is already packed: securing a mortgage, finding the right neighbourhood, negotiating your offer, and preparing for closing day. But one lesser-known step in the process often leaves buyers scratching their heads — title insurance.
You’ve probably heard your real estate lawyer mention it in passing or seen it listed in your closing costs. But what is title insurance, and more importantly, do you really need it?
Let’s break it down.
What Is Title Insurance?
Title insurance is a one-time purchase (typically under $500) that protects homeowners and lenders from potential issues with the legal ownership of a property. It kicks in if something surfaces that wasn’t caught during the initial title search — which is more common than you might think.
Some of the things title insurance can cover include:
Undisclosed liens from previous owners (e.g. unpaid property taxes, utility bills)
Errors in public records, surveys, or title documents
Encroachments from neighbouring properties (e.g. fences or sheds built over the property line)
Building permit violations from past renovations
Zoning issues that prevent you from using your home as intended
Fraudulent claims of ownership
Legal costs related to defending your title
It’s essentially a safety net that protects your biggest investment — your home — from hidden surprises.
Is Title Insurance Mandatory in Ontario?
No, title insurance isn’t mandatory for homeowners in Ontario — but it is highly recommended by most real estate lawyers and mortgage lenders. In fact, if you’re getting a mortgage, your lender may require you to get a lender’s policy to protect their interests. You can also purchase an owner’s policy to protect yourself.
Both policies are paid once at the time of closing, and coverage lasts as long as you own the property.
Title Insurance vs. Title Search: What’s the Difference?
It’s a common misconception that title insurance replaces a traditional title search — but they actually work together.
A title search is the process your lawyer uses to confirm the legal ownership of the property, check for liens or encumbrances, and ensure there are no obvious problems. It’s an essential part of closing on a home.
Title insurance, on the other hand, protects you after the fact — in case anything was missed or arises in the future. For example, if a utility lien was incorrectly filed under a different name and not caught during the title search, title insurance could step in to cover the cost.
Real Examples of Title Insurance in Action (Yes, Even in Ottawa)
These aren't just hypotheticals — title insurance has saved many homeowners in the Ottawa area from major legal and financial headaches:
A homeowner in Nepean found out after purchasing their home that a portion of their driveway extended onto a neighbour’s land. A dispute followed, but title insurance covered the legal fees and resolution.
A buyer in Centretown discovered a previous owner had done a basement renovation without a permit. When the city required retroactive permits and inspections, title insurance covered the costs.
In a case of title fraud, a criminal tried to pose as the homeowner and take out a second mortgage on the property. Title insurance prevented the legitimate owner from being held liable.
While these situations are rare, they can be financially devastating without protection.
What Isn’t Covered by Title Insurance?
Like all insurance, title insurance has its limits. It typically does not cover:
Environmental issues (e.g. contamination, underground oil tanks)
Known title issues that were disclosed prior to closing
Native land claims
Future zoning changes
Repairs or upgrades you want to make post-purchase
It’s always smart to ask your lawyer or broker exactly what’s covered under your specific policy.
How Much Does Title Insurance Cost in Ottawa?
Most policies for residential homes in Ottawa cost between $250 and $500 for an average-priced home. The cost is based on the value of the property and whether you’re purchasing both a lender’s and owner’s policy. Your lawyer typically arranges this during closing.
It’s a one-time fee — there are no ongoing payments like other forms of insurance.
Should You Get Title Insurance When Buying in Ottawa?
If you’re working with a reputable real estate lawyer in Ottawa, they’ll almost always recommend getting an owner’s policy. The cost is minimal, especially compared to the potential expense of fixing a title issue later on.
In a city like Ottawa, where a mix of century-old homes and new builds can both come with hidden title problems, it’s a smart move — and a relatively inexpensive one.
Buying a Home in Ottawa? Let’s Make Sure You’re Protected.
At New Purveyors, we work closely with trusted legal professionals to ensure our buyers are informed and protected at every stage of their transaction. Whether it’s understanding title insurance, navigating closing costs, or choosing the right neighbourhood, we’re here to guide you.
Have questions about buying or selling in Ottawa? Contact us for honest advice, local insight, and a team that’s with you every step of the way.
