What title insurance means in Canada and how lender and homeowner title insurance protect against title-related losses.
Title insurance is insurance that protects against certain losses related to a property’s title or ownership. In Canadian mortgage transactions, it may protect the lender, the homeowner, or both depending on the policy.
Title insurance is one of the most common closing terms borrowers hear without fully understanding. It matters because problems tied to title can affect ownership, mortgage registration, and fraud risk.
FCAC says your lender may require title insurance as part of your mortgage contract. It also notes two common forms:
FCAC also notes that title insurance can help protect against losses related to title fraud, and that the fee is usually a one-time premium.
At closing, the lawyer or notary may arrange title insurance because the lender requires it and the buyer also wants homeowner coverage. The buyer pays a one-time premium as part of the closing costs.
Title insurance is not the same as mortgage default insurance. Default insurance protects the lender against mortgage default. Title insurance protects against certain title and ownership-related risks.
Borrowers also sometimes assume title insurance replaces the title search. In practice, the legal workflow still matters, and exact treatment depends on the transaction.
Coverage scope, exclusions, and availability vary by province, insurer, and policy wording. This page is educational only and does not replace legal advice on a specific closing.