Title Insurance (also known as property risk insurance) is designed to protect a client’s property or vacant land against risks related to ownership and the client’s right to occupy and use that land.

The benefits of title insurance for owners

The security provided by title insurance is often overlooked by property lawyers and conveyancers, but for a relatively small price, the cost far outweighs the associated financial risks. Its usefulness can be underestimated because robust safeguards are inherently built into the conveyancing process. Yet, even when inspections and contracts are true and thorough prior to settlement day, an existing problem may not be detected in any pre-purchase inspections. In this circumstance, title insurance becomes invaluable, covering any costly liabilities that surface later.

The conveyancer’s strategic advantage

For the modern lawyer and conveyancer, recommending title insurance is not just an added service, it is a strategic choice that significantly enhances the client experience and strengthens the firm’s standing. By recommending this vital cover, conveyancers proactively address the hidden risks of property ownership, including the increasing threat of digital vulnerability and registration fraud inherent in today’s electronic transactions. When a client’s property investment is secured against unforeseen title defects, it minimises post-settlement stress and ensures a truly seamless experience. Title insurance acts as an effective, client-focused tool that reinforces the firm’s reputation as a highly diligent practice, leading directly to positive customer experiences, strong referrals, and sustained professional trust.

What risks are covered by title insurance?

It’s important to clearly distinguish that title insurance does not replace conveyancing due diligence, such as building inspections, council certificates, survey reports or any outstanding notices. Instead, it is a tool that supplements these notices and certificates, providing protection against risks related to their processing and completion.

For instance, title insurance could protect your clients from:

Property certificate risks before settlement: This could include errors in local government or strata management certificates, errors in the review process by a legal professional, development proposals or adverse circumstances affecting the land that were not disclosed, encroachment issues that would have been revealed by the appropriate boundary or identification survey, and forced removal of illegal works.
General ownership risks occurring before settlement: Including, forgery, fraud and other criminal acts, incorrectly signed or registered documents, problems relating to the legal right to access water, zoning problems, breaches of subdivision laws, or third party claims against the insured owner.

General ownership risks occurring before or after settlement: Including, registration gap claims, rental costs incurred if the property cannot be occupied, encroaching neighbours, or third-party work on the land resulting in the removal or remediation of insured land.

You can review more items covered by InfoTrack’s title insurance policy here.

What is not covered by title insurance?

Title insurance will not cover your clients from issues that are known to the purchaser at the time of settlement. If a client knowingly settles despite any defects or notices raised in the conveyancing process, they will not be covered. Furthermore, title insurance does not cover anything already included in a client’s personal home and contents insurance, such as damage to personal possessions in a fire or a flood.

Is title insurance expensive?

Title insurance is generally purchased as a one-off payment and does not include excess on claims. The premium amount varies according to the location and price of the property. The costs are relatively low for the extensive coverage provided across houses, strata or vacant land with prices starting from around 1% or lower of the purchase price. When damages incurred from these liabilities may be well above $100,000 for clients, this additional investment is a worthwhile payment to supplement your due diligence.

How long does it last?

Title insurance will protect your clients for as long as they are the registered title holder and own the land. When it is sold onto another person, the title insurance will cease to exist.

In summary, title insurance provides an essential layer of post-settlement protection for property buyers, effectively mitigating against unforeseen financial burdens stemming from title defects. For conveyancers, recommending this product demonstrates professional diligence and is a key measure in securing a positive customer experience.

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