Consumer Guide 2015 mbabc.ca | 29
"Some of the covered title risks for
residential properties include someone else
claiming an interest in the title to your land,
existing liens on title, encroachments or
setback violations, tax arrears, existing work
orders, adverse matters that would have
been revealed by an up-to-date survey and,
of course, fraud and forgery to the extent
that they aff ect the title," says Magee.
That means that if the previous owner
bounced a cheque for the property taxes,
if someone fraudulently transfers your
property into his own name, takes out a
mortgage and runs away with the money,
or if a land survey failed to reveal that your
garage is actually built partially on your
neighbour's property and you have to
rebuild it on your own land, you're covered
against the cost of resolving these issues.
Another particular benefi t of title
insurance is that the insurer is obligated
to compensate you in case of loss as well
as defend you in case of a dispute, so
the insurance company will hire a lawyer
to represent you if necessary. Also, most
lenders accept title insurance in lieu of a
survey or real property report, which saves
money and speeds up the closing process.
Basic coverage
Homeowner's insurance is yet another
type of insurance that all lenders require,
as they want to know the mortgage will be
paid should the building be damaged. Basic
coverage insures you against fi re, lightning
strikes, windstorms, hail, freezing of the
plumbing system and theft, says Cam Strong,
CEO of Invis/Mortgage Intelligence. Popular
additional riders include coverage in case
of earthquake or fl ooding, and premiums for
homeowner's insurance are paid annually.
"One should purchase coverage at least
equal to the estimated replacement cost of
the home," explains Strong. "replacement
cost is the rebuilding cost necessary to
repair or replace the entire home and is
not the market value of the home, nor the
home's purchase price or the cost of the
land, nor the outstanding amount of any
mortgage loan."
Meanwhile, mortgage insurance – a
type of creditor insurance – can off er peace
of mind when it comes to securing your
largest debt. "It's an aff ordable way to buy
protection against fi nancial hardship for
you or your surviving family members in the
event of death, disability or critical illness,"
says Strong. "With creditor life/critical illness
insurance, the outstanding balance of your
mortgage is paid off in the event of your
death or a specifi ed critical illness diagnosis.
Creditor disability insurance has the benefi t
of paying your monthly mortgage payment if
you become disabled."
While you may have insurance coverage
through work or elsewhere, policies and
terms vary widely so it's important to check
what you're actually covered for. Moreover,
keep in mind that if your insurance is
through your employer or purchased
directly from your lender, you will lose your
coverage if you leave your job or switch
lenders when you renew. Your mortgage
broker can refer you to an insurance broker
that can provide portable coverage and
competitive pricing.
P R O U D M E M BE R O F
Invis.ca
1·866·854·6847
MortgageIntelligence.ca
1·866·304·8455
DON'T SLEEPWALK THROUGH YOUR
MORTGAGE RENEWAL!
It's a great time to save money.
