Are You at Risk of Unseen Expenses? Use This Property Insurance Checklist
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Property title insurance often enters the conversation late in the home buying process. You may be finalising your contract, confirming your settlement date, and then your solicitor or conveyancer mentions it: “Would you like to take out a title insurance policy?”
It sounds important. It also sounds optional. And with so many costs already accounted for, it may feel like one more decision you are not fully equipped to make.
Property title insurance is designed to protect against legal risks related to the ownership of land. These risks are not always visible. They may not appear in public records. They may not be uncovered by the standard searches your solicitor performs. And they can lead to significant financial consequences if discovered after settlement.
But is it worth getting in your case?
This article will not attempt to sell you a policy. Instead, it will guide you through a clear, practical way to assess whether title insurance may offer meaningful protection for your situation. You will get a summary of what the policy covers, where it fits in with existing legal protections, and a step-by-step checklist to evaluate your risk level. By the end, you will have a structured way to decide whether this is a worthwhile part of your property purchase.
What Is Property Title Insurance and Why It Exists
Property title insurance is a one-time policy that protects homeowners and buyers from certain legal risks tied to the ownership of their property. Unlike building or contents insurance, which covers physical loss or damage, title insurance focuses on hidden legal issues that may affect your right to use, sell, or fully enjoy the property you have purchased.
These are not everyday risks, but they do occur. Some buyers have moved into their new homes only to receive a letter from the council demanding that an unapproved structure be removed. Others have found themselves in disputes over boundaries that were never clearly marked or have discovered that past land use breached zoning rules that were never disclosed.
Even with a careful conveyancing process, there are limits. Solicitors and conveyancers perform important searches, but some issues cannot be found in databases or revealed in official documents. Title insurance exists to offer financial protection when those issues surface after settlement.
It is not legally required, and it is not necessary for every buyer. However, as property transactions become more complex, it is being recommended more often by legal professionals as a form of risk management. Before deciding if it is the right fit for your purchase, it helps to understand what the policy includes and what it does not.
What It Covers and What It Does Not
Below is a simplified overview of what a typical residential title insurance policy may cover, and what it generally excludes.
What It Typically Covers:
- Title fraud or forgery
If false documents are used to sell or mortgage the property without your knowledge, the policy may help cover legal costs and losses.
- Boundary and encroachment issues
If a fence, shed, or part of a building crosses a legal boundary, and you become responsible for resolving it, the policy may provide cover.
- Unapproved building work
If a previous owner constructed a deck, carport, or other structure without approval, and the council issues a notice to remove or rectify it, the policy may assist with those costs.
- Errors in title registration
Mistakes in government records that affect your ownership rights may be covered.
- Unpaid rates or taxes
If outstanding council rates or land tax from before your ownership were missed during the process, you may be reimbursed.
- Zoning or planning non-compliance
If a past breach of local planning laws results in a formal penalty or restriction, the policy may offer support.
- Registration gap issues
If a third party lodges a caveat or claim during the short period between settlement and official registration, the policy may help protect your interest.
What It Does Not Cover:
- Issues already known at the time of purchase
Anything disclosed in the contract or revealed before settlement is not covered.
- Physical defects or maintenance problems
These are typically addressed through building inspections and home insurance, not title insurance.
- Environmental contamination
The cost of addressing polluted land or hazardous materials is excluded.
- Problems caused by the new owner
If you make unapproved changes after settlement, the policy does not apply.
- Non-legal or lifestyle disputes
Title insurance does not cover noise complaints, neighbour disagreements, or personal preferences.
Title insurance is most valuable when a hidden legal issue results in a financial loss after settlement. It is not a substitute for legal due diligence, but it can serve as a useful safeguard in situations that fall outside standard legal checks.
Legal Protections in Place (And Their Limitations)
Australia’s land ownership system is built on what is known as the Torrens Title system, a register-based method of recording and transferring property rights. In Queensland, this system is governed by the Land Title Act 1994. It provides certainty by allowing buyers to rely on what appears in the land title register when purchasing a property.
To support this, the state also offers a form of compensation through the Torrens Assurance Fund (TAF). This fund may assist you if you suffer financial loss due to certain errors or fraudulent transactions related to the title. For example, if your ownership is affected because someone lodged a fraudulent dealing, or if the register contains a clerical mistake, you may be eligible to claim compensation.
However, the protection only applies in very specific situations. The fund does not cover most of the legal risks that title insurance is designed to address. If a structure on the property was built without council approval, or if a fence crosses the boundary without being noted on the title, the TAF will not help you. It also does not offer protection against unpaid rates, planning breaches, or land use violations that were never recorded on the register.
This is where title insurance becomes useful. It is not a replacement for the Torrens system or the legal protections already available. Instead, it fills the gaps. It covers risks that exist outside the title itself, problems that may never have been recorded but still have serious consequences for the property owner.
Title Risk Self-Assessment: The 8-Point Checklist
Title insurance is not necessary for every buyer. However, certain properties and purchase situations carry a higher chance of legal complications. The following checklist is designed to help you assess whether your purchase involves risk factors that may justify the added protection.
Answer each question with a simple Yes or No.
| Question | Why It Matters | Yes/No |
| 1. Is the property older than 20 years or recently renovated? | Older or modified homes may have undocumented works or outdated approvals. | |
| 2. Are there visible structures not mentioned in the contract? | Sheds, decks, or extensions may lack formal approval, which can lead to council action. | |
| 3. Is the seller unable to provide full records of building approvals or compliance certificates? | Missing documentation can create uncertainty about legal compliance. | |
| 4. Are the boundary lines unclear or inconsistent with fences or structures on site? | Undetected encroachments may result in disputes or require costly resolutions. | |
| 5. Was the property purchased at auction, without standard conditions or prior inspections? | Auctions reduce time to conduct due diligence, increasing the chance of missing hidden risks. | |
| 6. Are you buying interstate, or have you not personally inspected the property? | Remote or sight-unseen purchases may limit your awareness of on-site conditions. | |
| 7. Is the land part of a subdivision, strata title, or irregular lot? | These property types may have complex title structures or shared boundaries prone to errors. | |
| 8. Would a legal issue costing several thousand dollars place financial pressure on you? | Limited financial flexibility increases the potential impact of unexpected legal costs. |
Your Scorecard: How to Interpret the Risk
Now that you have completed the checklist, count how many times you answered Yes. The number of “Yes” responses gives you an indication of the level of title-related risk that may apply to your property purchase.
| Number of Yes Responses | Risk Level | What It May Mean |
| 0–2 | Low Risk | Your property may carry minimal title-related risks. Title insurance may not be necessary, but you can still discuss it with your solicitor. |
| 3–5 | Moderate Risk | Some factors in your purchase suggest there may be risks that are difficult to detect. Title insurance should be considered as part of your legal strategy. |
| 6–8 | High Risk | Your purchase involves several risk factors. Title insurance is strongly recommended to help manage possible legal or financial complications. |
This scorecard is not a substitute for legal advice. However, it can help you have a more informed and focused conversation with your solicitor or conveyancer.
If your property falls into the moderate or high-risk range, title insurance may provide valuable protection and peace of mind.
A Smarter Way to Approach Uncertainty
Buying a property is one of the most significant financial decisions you will make, and with it comes a degree of legal complexity. Most of the time, everything goes smoothly. But when a problem surfaces after settlement, something you could not have reasonably predicted, it can turn a well-planned purchase into an unexpected legal or financial burden.
Property title insurance is not about predicting every risk. It is about creating a buffer for the ones that cannot be seen.
If you found yourself answering “yes” to several questions in the checklist, or if you are still uncertain about what may be hidden behind the contract, this type of insurance may provide peace of mind worth considering. It is a small, one-time cost that may help avoid the weight of a much larger issue later on.
Before you make your decision, speak with a solicitor or conveyancer. Bring your checklist and ask how the policy applies to your situation. Every property is different, and getting advice tailored to your purchase is the best way to protect your interests.