Title insurance is a common part of buying or refinancing a home in British Columbia. It can protect a property owner or mortgage lender from certain title defects, fraud, survey problems, and other issues that may not be discovered before closing.
BC has a secure land title system, and title fraud is considered rare. Buyers can still face losses caused by registration errors, unknown liens, encroachments, permit problems, or defects that were not revealed during the usual closing searches. Title insurance transfers some of these risks to an insurer for a one-time premium.
Quick answer: Title insurance is not legally required when buying a home in BC, but a mortgage lender may require a lender’s policy. Buyers can also obtain an owner’s policy for their own protection. Coverage varies, so the policy terms and exclusions should be reviewed before closing.
What Is Title Insurance?
Title insurance is a policy that protects against specified losses connected to the ownership or title of real property. Unlike home insurance, which generally covers future events such as fire, theft, and water damage, title insurance mainly addresses covered title risks that already existed when the policy was issued.
Some policies also include protection against certain future risks, such as title fraud committed after the purchase. The exact coverage depends on the insurer, the type of property, and the wording of the policy.
A title insurance premium is normally paid once as part of the closing costs. There is no monthly or annual premium for a standard residential policy. An owner’s policy will usually remain in place for as long as the insured owner retains an interest in the property, subject to the terms of the policy.
What Does Title Insurance Cover in BC?
Title insurance policies are not identical, but a residential owner’s policy may cover losses arising from risks such as:
- Fraud, forgery, or identity theft affecting the insured title
- Another person claiming an ownership interest in the property
- Unknown liens or charges registered against the property
- Errors in public records or the registration of the transfer
- Encroachments that would have been revealed by an up-to-date survey
- Existing structures that violate certain zoning or municipal bylaws
- Work completed without required building permits
- A lack of legal access to the property
- Defects that make the title unmarketable
- Legal costs associated with defending the insured title against a covered claim
Coverage depends on the policy. A risk included by one insurer may be limited or excluded by another. Some coverage may also depend on whether the property is a house, strata unit, vacant lot, rental property, or commercial property.
What Does Title Insurance Not Cover?
Title insurance does not protect a buyer from every problem involving a property. Common exclusions or limitations may include:
- Defects the buyer knew about and accepted before the policy was issued
- Issues created or agreed to by the insured owner
- The physical condition of the building
- Normal wear, structural defects, mould, or water damage
- Environmental contamination or hazards, unless expressly covered
- Changes in zoning or land-use rules after the policy date
- A decline in the property’s market value
- Problems discovered during an inspection that do not affect title
- Indigenous land claims and other matters excluded by the policy
Title insurance is not a replacement for a home inspection, property insurance, contract review, or legal advice. Each serves a different purpose in a real estate transaction.
Owner’s Title Insurance vs Lender’s Title Insurance
There are two main types of residential title insurance in BC: an owner’s policy and a lender’s policy.
Owner’s Title Insurance
An owner’s policy protects the buyer’s interest in the property. If a covered problem causes the owner a financial loss, the policy may pay the claim or cover the cost of defending the owner’s title.
The insured amount is commonly based on the purchase price. Some policies provide for the coverage limit to increase as the property rises in value, subject to a maximum set by the policy.
Lender’s Title Insurance
A lender’s policy protects the bank or mortgage lender, not the buyer. It generally covers the lender’s interest in the property up to the outstanding mortgage amount.
Many lenders require title insurance as a condition of financing. Paying for a lender’s policy does not necessarily mean that the buyer also has an owner’s policy. Buyers should ask their lawyer what coverage is being purchased and whose interest it protects.
Title Insurance vs a Title Search
A title search and title insurance are related, but they do different things.
| Title Search | Title Insurance |
|---|---|
| Examines the current records held by the Land Title and Survey Authority of BC | Provides insurance against specific covered risks |
| Shows the registered owner | May cover certain defects that were not found before closing |
| Lists registered mortgages, liens, easements, covenants, and other charges | May cover fraud, forgery, survey issues, and specified off-title risks |
| Helps a lawyer identify matters that must be addressed before closing | May pay covered losses or legal expenses if a claim arises |
| Provides information, not insurance coverage | Does not replace the lawyer’s review of title |
A title search only shows information recorded in the land title system. It may not reveal an unregistered interest, forged document, boundary encroachment, missing permit, or municipal issue. Title insurance can provide protection against some of these risks if they fall within the policy.
A real estate lawyer serving Victoria and Vancouver Island will normally conduct a title search and review the registered charges as part of the purchase. Title insurance adds another layer of protection rather than replacing that legal work.
Title Insurance vs a Property Survey
A property survey shows the location of buildings, boundaries, and other physical features of the land. It may reveal that a garage crosses a property line, a fence is in the wrong location, or part of a structure sits within an easement or setback.
Title insurance may provide coverage for certain unknown survey defects or encroachments. For this reason, lenders sometimes accept title insurance when a current survey is unavailable.
The two are not equivalent. A survey gives the buyer information about the property before closing. Title insurance provides financial protection if a covered issue is discovered later. A buyer who needs certainty about boundaries or plans to build, renovate, or install a fence may still benefit from obtaining a survey.
How Much Does Title Insurance Cost in BC?
Residential title insurance is purchased with a one-time premium. The cost depends on the purchase price, mortgage amount, property type, insurer, and coverage selected.
For many residential transactions, title insurance costs several hundred dollars. Published guidance from Canadian title insurers has placed common residential premiums within a broad range of approximately $150 to $800, although higher-value or unusual properties may cost more. The lawyer handling the transaction can obtain a current quote based on the property and financing.
Title insurance is only one of several expenses a buyer may need to pay at completion. Other costs may include legal fees, registration charges, adjustments, and BC property transfer tax. Tathgar Law’s BC Property Transfer Tax Calculator can provide an estimate of the provincial tax payable on a purchase.
Buyers of newly built homes may also need to budget for GST. The BC New Home GST and Rebate Calculator can help estimate the tax and any available rebate.
Is Title Insurance Required in BC?
There is no general law requiring every BC property buyer to purchase title insurance. A mortgage lender may still require a lender’s policy before advancing the mortgage funds.
A cash buyer can usually decide whether to obtain an owner’s policy after reviewing the risks with a lawyer. The decision may depend on the type of property, available surveys, lender requirements, planned use, and any concerns discovered during the title review.
Do BC Home Buyers Need Title Insurance?
Whether title insurance is worthwhile depends on the transaction. British Columbia uses a Torrens-based land title system designed to provide secure and reliable proof of ownership. The Land Title and Survey Authority of BC maintains the province’s land title and survey records, and the BC Financial Services Authority has described title fraud as exceedingly rare in the province.
The security of BC’s land title system does not remove every risk. Title insurance may be useful when:
- The mortgage lender requires it
- No recent property survey is available
- The property has additions, renovations, garages, sheds, or other structures that may raise permit or boundary questions
- The buyer wants protection against covered title fraud and forgery
- The transaction must close before every off-title search can be completed
- The property has an unusual ownership or registration history
An owner’s policy is often a relatively small cost compared with the purchase price and the potential expense of resolving a title dispute. It is still an insurance product with exclusions, not a guarantee that every property-related loss will be covered.
Title Insurance for Condos and Strata Properties
Title insurance is available for strata units as well as detached homes. A strata policy may cover certain title defects, fraud, liens, or problems involving the legal description of the unit. It does not protect the buyer from the strata corporation’s financial condition or every cost associated with the building.
Before buying a condo, purchasers should still review the strata’s minutes, bylaws, financial statements, insurance, Form B, contingency reserve fund, and planned repairs. The strata’s depreciation report can reveal possible future repair costs that would not normally be covered by title insurance.
Can Existing Homeowners Buy Title Insurance?
Title insurance is commonly arranged when a property is purchased or refinanced, but an existing homeowner may also be able to obtain a policy. Insurers may offer coverage designed for owners who did not purchase an owner’s policy when they acquired the property.
The available coverage and underwriting requirements may differ from those of a policy issued at closing. An existing homeowner who is concerned about fraud or another title issue should ask a real estate lawyer whether a policy is available and what it would cover.
Frequently Asked Questions About Title Insurance in BC
Is title insurance mandatory in BC?
Title insurance is not required by provincial law for every property purchase. A bank or mortgage lender may require a lender’s policy as a condition of financing. An owner’s policy is separate and protects the buyer’s interest, subject to its terms.
How much does title insurance cost in BC?
Many residential policies cost several hundred dollars. Published insurer guidance has placed typical premiums within a broad range of about $150 to $800, but the price depends on the property value, mortgage, property type, insurer, and coverage. It is normally paid once rather than renewed annually.
Does title insurance protect against title fraud?
Many owner’s policies cover specified losses caused by title fraud, forgery, or identity theft, including some fraud occurring after the purchase. Coverage limits and exclusions apply. The policy should be reviewed to confirm exactly what protection is included.
Is a lender’s title insurance policy enough for the homeowner?
No. A lender’s policy protects the mortgage lender’s financial interest. It does not provide the same protection to the homeowner. Buyers should confirm whether their closing includes an owner’s policy, a lender’s policy, or both.
Does title insurance replace a title search or home inspection?
No. A title search reveals the registered owner and charges against the property. A home inspection examines its physical condition. Title insurance covers certain risks listed in the policy. Buyers may need all three because each addresses different concerns.
Who arranges title insurance in a BC real estate purchase?
The lawyer or notary handling the conveyance will usually discuss title insurance, obtain a quote, and arrange the policy as part of the closing. Buyers should ask who the policy protects, what risks it covers, and what exclusions apply.
Get Advice Before Your Real Estate Closing
Title insurance can be a useful part of a BC real estate purchase, but the right coverage depends on the property and transaction. A title search, contract review, lender requirements, available survey, and policy exclusions should all be considered before deciding how to proceed.
If you are buying, selling, or refinancing property in Victoria, Langford, Sooke, Duncan, Nanaimo, or elsewhere on Vancouver Island, contact Sunny Tathgar. Tathgar Law can review the title, explain whether title insurance is appropriate, coordinate the policy, and handle the legal work required to complete the transaction.
This article provides general information about title insurance in British Columbia and is not legal or insurance advice. Coverage varies by insurer and policy. Review the policy and obtain advice based on the specific transaction.
