Like all other insurance policies, a title insurance policy is there to protect the policyholder in the event of certain events taking place. One of the most common forms of coverage is called “gap coverage” or “gap insurance”. This coverage protects the buyer between the time the buyer pays the seller for the home and takes possession of it, to the time it takes for the Alberta Land Titles Office to register the buyer’s name as the new owner on the Certificate of Title.
Another purpose for title insurance is to cover the insured from title fraud. For instance, imagine you purchased a property for someone who was pretending to be someone else? Or imagine that you are buying a property from someone who provided you with fraudulent paperwork.
Title Insurance policies can also protect the insured against unknown deficiencies such as deficient septic tanks or a deck that does not have the appropriate permits in place. Like all insurance policies, it depends on the type of policy being purchased.
Obtaining a policy of title insurance will also allow the buyer and seller to close the deal before the Certificate of Title returns from the Alberta Land Titles Office. This is often permitted by the buyer’s lender as well, so long as the form of coverage is permitted by the buyer’s lender.
Like all other insurance policies, this policy protects the owner of the policy and any other named parties. This means that you can obtain a policy to protect the buyer only, or you can purchase a policy to protect the buyer’s lender only, or you can purchase a policy to protect both the buyer and the lender.
Title Insurance companies charge different rates. It also depends on who you are buying the policy for? (depending on your lender’s requirements, it may be necessary that an insurance policy is purchased on their behalf and not just yours).
The cost of a title insurance policy is directly correlated with the value of the home you are buying or selling.
We have seen title insurance policies fluctuate in cost from as little as $150 to $2500.
You are not required to obtain a new title insurance policy each year. The title insurance policy you purchase has a one-time fee and will protect the buyer or lender for as long as the new buyer owns the property.