British Columbia Law
Title Insurance in BC: What It Covers and Why Buyers Need It
<p>When you buy a home in BC, your lawyer conducts a title search to confirm that the seller has the right to sell, that no unexpected liens or encumbrances attach to the property, and that the legal description matches what you're buying. But title searches have limits — and that's where title insurance comes in.</p>
<h2>What Title Insurance Covers</h2>
<p>Title insurance protects you against losses arising from problems with the property's title that existed before you bought — and that your title search may not have detected. Common covered risks include:</p>
<ul>
<li><strong>Title fraud</strong> — A forged signature on a transfer, or identity theft used to fraudulently mortgage your home</li>
<li><strong>Unknown liens and encumbrances</strong> — Unpaid property taxes, judgments, or builder's liens that weren't discovered in the title search</li>
<li><strong>Survey defects</strong> — Encroachments onto neighbouring property, or neighbouring structures that encroach on yours, that weren't visible in the title search</li>
<li><strong>Gaps in title</strong> — Problems in the historical chain of title that were overlooked</li>
<li><strong>Zoning and bylaw violations</strong> — Existing violations (not future ones) that affect your use of the property</li>
<li><strong>Forced removal of a structure</strong> — If a structure was built without proper permits and you're required to remove it</li>
</ul>
<h2>What Title Insurance Does Not Cover</h2>
<p>Title insurance is not a home inspection policy and does not cover physical defects you could have discovered through inspection. It also generally does not cover:</p>
<ul>
<li>Problems you knew about before you bought</li>
<li>Future zoning changes or bylaw amendments</li>
<li>Environmental contamination</li>
<li>Matters that a current survey would have shown</li>
</ul>
<h2>Lender vs. Owner Policies</h2>
<p>In BC, most mortgage lenders require title insurance to protect their interest — but a lender's policy only protects the lender, not you as the owner. An owner's title insurance policy protects your equity in the property and is typically purchased separately (and inexpensively) at closing.</p>
<p>Both lender and owner policies are one-time premiums paid at the time of purchase — there are no ongoing premiums, and the owner's policy lasts for as long as you own the property.</p>
<h2>Title Insurance vs. a Real Property Report (Survey)</h2>
<p>Some buyers in BC substitute title insurance for a current land survey to save money — and many lenders accept this. However, a survey reveals physical encroachment issues that title insurance may not fully address. Your lawyer can advise which approach is appropriate for your specific property.</p>
<h2>Title Fraud in BC</h2>
<p>Title fraud — where fraudsters forge documents to transfer or mortgage your home without your knowledge — is a real risk, particularly for properties that are mortgage-free. Title insurance provides coverage for this scenario, including the cost of defending your title and compensating you for losses if the fraud succeeds.</p>
<p>For most BC home buyers, owner's title insurance is an inexpensive and sensible protection — typically costing a few hundred to a few thousand dollars as a one-time premium, depending on the property's value.</p>
This article is general information, not legal or tax advice. Meetings are by appointment only, by phone or secure video.