What is Title Insurance?

What is Title Insurance?

For an initial up-front fee (no annual premiums + no excess on claims) Title Insurance provides coverage for unknown risks which could impact your home, strata apartment, vacant land, rural-residential, +/or commercial property for the entire period of your ownership of the property.

Title Insurance can be purchased at anytime, before or after you acquire the property.

While Title Insurance is common in the United States, it's still a relatively new product to the Australian market.

Title Insurance also protects you from risks that may arise in the future, such as forgery +/or fraud, encroachments and unregistered easements on your property.

Who offers Title Insurance in Australia?

There are only two Title Insurance companies in Australia: First Title and Stewart Title Limited.

Note: Insurance premiums are subject to change at anytime, please contact us to organise accurate quotes.

The premiums provided below are provided as examples only in order to give an indication of the quantum involved in securing this kind of insurance coverage.

These amounts do not reflect nor are in anyway represented as current premium prices.

First Title

First Title quotes its policies from $225 (one-time fee) for strata properties and from $300 (one-time fee) for standard residential properties.

Stewart Title

Stewart Title quotes its premiums specific to the state or territory in which the property resides.

‍For example: NSW residential Title Insurance premiums start at $330 while premiums for strata titles start at $247.50.

The premium (including stamp duty and GST) for a $500,000 property is around $500, and for a $750,000 is around $625.

Explainer Video: Boundary & Survey Defects Example

"What isn’t covered by Title Insurance?

Like all insurance policies, Title Insurance policies will contain a number of exclusions.

You will need to read these carefully and take legal advice about their meaning before deciding whether Title Insurance is for you.

It is especially important to understand that title insurance policies do NOT provide cover in respect of destruction of or damage to a building on your land – title insurance is not the same as, or a substitute for, home building or home contents insurance.

Common exclusions (i.e. things NOT covered) in the policies we have seen include:

❌ Dilapidation or pest infestation of buildings;

❌ Buildings that fail to comply with proper building standards e.g. the Building Code of Australia;

❌ Environmental contamination;

❌ Things that are known to you at the date your purchase of the land settles (for example, it is already contained in the contract of sale as a known issue)."

The above topic "What isn't covered by Title Insurance" was extracted from the Financial Rights Legal Centre - Insurance Law Service Factsheet regarding Title Insurance.

What does Title Insurance cover?

Title insurance covers different risks depending on the type of property being insured.

Existing Residential Homeowner:

✅ Illegal building work;

✅ Title defects and planning errors;

✅ Fraud and forgery; and

✅ Survey and boundary defects.

Residential Home Buyer:

✅ Title defects and planning errors;

✅ Illegal additions and building work;

✅ Outstanding council rates and water rates;

✅ Non-compliance with existing zoning and planning laws;

✅ Third-party claims on the land;

✅ Registration gaps;

✅ Fraud and forgery; and

✅ Survey and boundary defects.

Residential Strata Buyer:

✅ Unapproved alterations;

✅ Outstanding council rates and water rates;

✅ Registration gaps;

✅ Fraud and forgery;

✅ Title defects and planning errors; and

✅ Unmarketability of title due to existence of a covered title risk.

Vacant Land:

✅ Incorrect boundaries;

✅ Planning and zoning;

✅ Encroaching structures built on your land;

✅ Errors on property searches and enquiries;

✅ Adjustment of taxes and various land charges; and

✅ Fraud.

Rural-Residential Buyer:

✅ Unapproved building works;

✅ Incorrect boundaries;

✅ Encroaching structures built on your land;

✅ Errors on property searches and enquiries;

✅ Adjustment of taxes and various land charges; and

✅ Fraud.

Commercial Property Buyer:

✅ Unapproved building works;

✅ Encroaching structures built on your land;

✅ Taxes, charges and levies;

✅ Legal right of access; and

✅ Competing interest claims.

Credits:

This FAQ was written by James D. Ford GAICD | Principal Solicitor, Blue Ocean Law Group℠.

Disclosure: Blue Ocean Law Group℠ is an authorised representative of both First Title + Stewart Title.

We may be paid a commission as an affiliate to compensate for the work involved in obtaining quotes + preparing & submitting an application on your behalf as part of the conveyancing process or after acquisition if you were not offered Title Insurance by your lawyer/conveyancer at the time you purchased your property.

Important Notice:

This FAQ is intended for general interest + information only.

It is not legal advice, nor should it be relied upon or used as such.

We recommend you always consult a lawyer for legal advice specifically tailored to your needs & circumstances.