Over the decades, we've observed common misconceptions relating to what title insurance does and doesn't cover. In order to find coverage for any claim, the issue must fall within a covered risk set out in the policy.
If the item falls within a covered risk, and is neither excluded nor excepted from coverage, then there is a valid claim under the policy. We encourage you to submit your claim for assessment, but before you do so, we do want to ensure you understand that there will be no coverage for some common claims we receive that may have no connection to a covered risk in the policy.
These include the following:
- Known title defects and other matters that were presented to you by the vendor or a home inspector before you purchased your property.
- The previous owner said the property was larger than it really is or neglected to advise you of issues with the property—vendor misrepresentation is not something the policy captures.
- The listing (MLS, for example) set out incorrect details e.g. size of the land, sewage system (private septic vs. municipal).
- Zoning by-law violations from home renovations or additions that you were responsible for.
- Issues that weren't listed in public records, such as unrecorded liens.
- Contractual matters set out as between the buyer and seller e.g. this could include holdbacks for issues identified in a home inspection report but not undertaken by the seller, home not left in a broom-swept condition, garbage left inside and outside that has to be discarded.
- Latent defects that are not connected to a covered risk in the policy:
- Knob and tube electrical wiring, tree root problems, gas storage tank leakage.
- Water leaks into home through the foundation e.g. inadequate grading around the perimeter of the home, blocked gutters causing water overflow, vertical or horizontal cracks in the foundation.
- Foundation failure e.g. the exterior drainage system such as drains, weeping tile or moisture protection membrane and sump pump failure.
- Mold, asbestos, vermiculite within the home.
- Environmental hazards e.g. oil tank for heating has a leak and has been seeping into the soil, septic system has a problem causing effluent to escape into the surrounding soil.
- Issues with insect or rodent infestations e.g. ants, termites, bats.
- Wear and tear or poor maintenance of your home and property e.g. worn shingles on the roof, replacing old windows or an old furnace.
- Title insurance is not a warranty for the correct functioning of systems at the home e.g. HVAC, appliances, swimming pool filter, heater and pump.
- Damage from fire, water or sewer backup.
- Burglary or home theft.
- Noisy or nuisance neighbours.
- Cost of a survey to confirm boundaries of the property or civil disputes with neighbours relating to disrespectful behaviour, tree disputes.
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