According to Joseph Richer, the registrar of the Real Estate Council of Ontario (RECO), It is not a provincial requirement to have title insurance but he does recommend it for buyers because Title Insurance covers losses related to:
Title issues that prevent you from having clear ownership of the property
Existing liens against the title such as unpaid property taxes
Issues related to encroachment of someone else's property -- if a structure had to be removed because it is partially on your neighbour's property
Errors in surveys or public records
Any other title related issue that could affect your ability to sell, mortgage or lease your home.
If title registration in your name can't occur on the date of close, the "gap" coverage in title insurance will allow your lawyer to close the sale of the property even if registration is delayed.
Title insurance can protect you against title fraud
Some title insurance can protect you in case your lawyer makes an error while handling the real estate transaction
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