What is title insurance in Alberta?

Title insurance is standard practice in Alberta real estate — virtually every lender requires a lender's policy, and most real estate lawyers recommend an owner's policy as well. Yet many Calgary buyers have only a vague understanding of what it protects against.

What title insurance covers

Title insurance covers losses arising from defects in the title that existed at the time of purchase but were unknown. The primary coverage categories are:

Title fraud: Someone forges the registered owner's signature to transfer the title or register a fraudulent mortgage. Title insurance reimburses the insured owner or lender for losses.
Survey errors and encroachments: A fence, garage, or addition that encroaches on the neighbour's property or violates a bylaw — even if this was not known at purchase.
Existing liens and encumbrances: A previously unregistered lien (contractor's lien, judgment) that surfaces after closing.
Zoning violations: An existing improvement that violates current or past zoning regulations.
Forced removal: A government order requiring removal of a structure that was non-compliant at the time of purchase.

Owner's policy vs lender's policy

Most Alberta lenders require the buyer to purchase a lender's (mortgagee's) title insurance policy — this protects the lender's security interest. The lender's policy does not protect the homeowner. A separate owner's title insurance policy protects the buyer's equity. Both are typically purchased simultaneously at closing, with the combined premium running $150–$400 for a standard residential property.

Title insurance vs Real Property Report

An RPR is a legal survey showing what exists on the land. Title insurance is a financial protection if something about the title is wrong. Some lawyers recommend title insurance instead of a new RPR when the existing RPR is dated — the title insurer will cover encroachment issues that might otherwise require a new survey. However, the two serve different purposes and are complementary, not interchangeable.

What title insurance does not cover

Title insurance does not cover defects that were known at purchase, environmental contamination, physical condition of the property, or future zoning changes. It is not a home warranty and does not replace a home inspection.

Frequently asked questions

Is title insurance mandatory in Alberta?

Lenders typically require a lender's title insurance policy as a condition of the mortgage. An owner's policy is not legally required but is strongly recommended by most Alberta real estate lawyers. The one-time premium of $150–$400 is modest protection against potentially catastrophic title losses.

Does title insurance replace a Real Property Report?

Some lawyers suggest title insurance as an alternative to ordering a current RPR when the existing survey is dated. The insurer accepts the risk of any encroachment or compliance issue that a new RPR would have revealed. However, an RPR provides transparent information about the property — title insurance is financial protection, not information.

How much does title insurance cost in Alberta?

For a residential property in Calgary, a combined lender's and owner's title insurance policy typically costs $150–$400, paid once at closing. The premium is based on the purchase price. There are no ongoing premiums — coverage lasts for as long as you own the property.

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This page is for general information only and does not constitute legal or tax advice. Consult a qualified Alberta lawyer or accountant for advice specific to your situation.