Title fraud is a danger in B.C., and home insurance can’t protect you from it.
It’s not just Ontario: title fraud cases are on the rise in B.C. as well. Daniela DeTommaso, President of FCT, recently sat with Weekend Mornings with Stirling Faux on 980 CKNW to discuss the rising threat.
“[Fraud has become] so sophisticated,” Daniela explains. “If you were to look at some of the [forged] identification that’s being used, an untrained person would never be able to tell the difference.”
Protecting consumers comes down to two things: detection and coverage. “As a title insurance company, not only are we there to protect you […], but our biggest goal is to prevent these things from ever happening,” says Daniela.
When it comes to protecting their property, many homeowners are used to relying on their home insurance. But it can’t protect them from title or mortgage fraud.
What’s the difference between home insurance and title insurance?
Home insurance covers you for things that can happen to/on your property such as:
- Damage to the home or other structures
- fire and flood
- medical liability
- damaged or stolen items
It protects the parts of your property you can touch—structures and items. But that’s only half of the story.
Title insurance protects the part of your property you can’t touch—your right to own it. That right is called your “title,” and if your title is defective, you can’t leverage your home equity or sell the property. There are many risks title insurance can cover, but one of the most damaging is the risk of someone stealing your right to ownership.
TITLE FRAUD
Title fraud is when someone impersonates a property’s owner, then either takes equity out or sells it. If someone registers a fraudulent mortgage on your property, it can cost tens of thousands in legal fees to repair your title, and you can’t sell or leverage your home until you do.
In B.C., if your home is fraudulently sold to an innocent buyer, they get to keep it. Without title insurance, you could lose your home and your equity, with no way to recoup your loss. Title fraud is a real danger, and home insurance can’t protect you from it.
How title insurance protects homeowners and homebuyers
A title insurance policy can cover your losses from losing the insured property, and also carries with it a duty to defend. “We have to pay any legal fees incurred in the course of trying to rectify the problem,” says Daniela. “We are someone to hold your hand through that process, and […] indemnify you against any [covered] loss or damage.”
How do I know if I have title insurance?
Most people with title insurance purchased it during closing. It’s a one-time premium, so there aren’t monthly insurance payments to remind you of your policy. Consult your closing documents and check for an owner’s title insurance policy—you’ll likely see a lender’s title policy, which unfortunately isn’t the same thing.
If you don’t find an owner’s policy, you can reach out to the title insurer who provided your lender policy. They’ll be able to tell you if you have owner’s coverage.
IF I DIDN’T BUY TITLE INSURANCE DURING CLOSING, IS IT TOO LATE?
No, it’s not too late. You can purchase title insurance no matter how long you’ve owned your home. For a one-time premium, you get coverage that protects you for as long as you have an interest in the property. It can also transfer to your spouse or heirs if they take ownership.
Your home is your biggest investment—don’t leave it at risk. If you would like to purchase Title Insurance for yourself, be sure to book a strategy call with me to discuss.