TITLE INSURANCE
As the name suggests, title insurance is a type of insurance that helps protect buyers and existing homeowners against financial loss caused by unexpected issues relating to the title and ownership of property.
Whilst home and contents insurance is intended to protect the physical structure of the property and your possessions from future damage (e.g. caused by flood or fire), title insurance is designed to protect you from claims against the property title itself (For more information on home and content insurance please refer to: (https://www.maplawyers.com.au/pre-settlement-home-insurance/).
As such, title insurance does not replace home and contents insurance, and we recommend you consider both.
To purchase a title insurance policy, there is a one-off payment, rather than ongoing payments. The amount payable will depend on the property value.
WHAT DOES TITLE INSURANCE COVER?
Whilst it will depend on the particular policy, title insurance can assist with a multitude of scenarios, including but not limited to:
- Non-approved building works on the property, for example a deck was added by a previous owner but they did not obtain the necessary council approval
- Boundary errors and encroachments, for example you discover that your fence encroaches onto the neighbouring property and must be relocated
- Compulsory land acquisitions by the government, if the government had the right to acquire some or all of the land prior to your purchase and you did not have knowledge of this
- Errors made by local councils in reporting charges, for example a local authority assesses additional rates against the property after settlement for a period prior to the policy date
- Another person’s fraud, for example a scammer may take out a fraudulent mortgage against your property
- Non-compliance with zoning or planning laws or unregistered easement or covenants which impact your use of the property
It is important to read the policy disclosure statement carefully to understand what is and isn’t covered. For example, different terms may apply to rural properties or properties over a certain size and there may be exclusions where you have knowledge of an issue prior to purchasing the policy.
