Title insurance is a one off policy a buyer can take out at purchase, covering certain defects in the title and in the property that the usual searches may not pick up. It doesn’t replace the searches and it isn’t compulsory. Whether to buy it is a decision for you and the insurer, not one we advise on.
What it is
It’s a general insurance product sold by insurers, not by lawyers or settlement agents. You pay a single premium at or around settlement rather than an annual one. The cover runs while you own the property.
The premium varies with the value of the property. Ask the insurer for a current quote and read the product disclosure statement, because what is covered and what is excluded differs between policies.
What policies are usually sold to cover
Coverage varies, so treat this as the general shape rather than a description of any particular policy:
- unregistered easements and interests that a title search would not show
- building work done without approval by a previous owner
- boundary problems and structures that encroach
- fraud and forgery affecting the title
- planning and zoning non compliance
Exclusions matter as much as the cover. A defect you already knew about at the time you took the policy out is usually excluded, which is why buying insurance instead of doing the searches does not work.
What your searches already find
A purchase in Western Australia normally involves a certificate of title, copies of the registered documents and orders and requisitions from the local government. Between them they find what is registered against the title and what the council has on record.
That is most of it. The three Landgate searches post sets out what those searches cover and what they don’t.
The gap between the two
The searches tell you what is on the record. Insurance is sold against things that are not on the record, that turn up later or that nobody found in time.
How big that gap is depends on the property and on how thoroughly the searching was done. On a straightforward suburban purchase with a clean title, current orders and requisitions and building plans that match what is standing there, the gap is small. On an older property with additions of uncertain origin, it is wider.
Do we recommend it?
A recommendation for an insurance policy is financial advice, which is not what we do. Your insurer or your broker is the right person for that question.
We can tell you what the searches on your own purchase did and did not cover. That is what you need before you can weigh up whether to insure the rest.
Frequently asked questions
Is title insurance compulsory in WA?
No. It’s optional and most buyers do not take it out.
Does it replace doing the searches?
No. Defects you already know about are usually excluded, so a buyer who skips the searches and insures instead can find they’re covered for nothing.
When do I have to decide?
Policies are usually taken out at or around settlement. Ask the insurer about the timing, because some cover depends on when the policy started relative to when you took possession.
Talk to us about your purchase
We act for buyers and sellers on residential and commercial property settlements across Perth and Western Australia. We can tell you what the searches on your purchase covered.
Call the settlements team on (08) 9220 4430 or download an itemised quote for your own purchase.
This article is general information. It is not legal advice and it is not financial advice. Whether an insurance product suits you is a question for the insurer or a licensed adviser.
