28th April, 2025
Purchasing property in New South Wales can be both exciting and overwhelming. Among the many decisions buyers face is whether to purchase title insurance. While it’s not compulsory, it can offer valuable protection against unexpected title-related issues.
What Is Title Insurance?
Title insurance is a one-off insurance policy that covers specific risks related to the legal ownership of your property. Unlike home or contents insurance, it doesn’t protect against future events. Instead, it deals with problems from the past that weren’t identified during the property transaction.
For instance, if the vendor completed renovations without council approval or if a neighbour’s fence encroaches on your land, title insurance could help manage the cost and legal consequences.
What Does It Cover?
Although conveyancers and solicitors conduct thorough checks during the purchase process, some issues can remain hidden. Title insurance provides a layer of protection in cases such as:
- Illegal building work
- Undisclosed or unregistered easements
- Boundary encroachments
- Title defects
- Zoning non-compliance
- Unpaid council or water rates
- Fraud or forgery affecting title
- Errors in public records
These risks, while uncommon, can be financially burdensome and stressful to resolve without cover.
Is It Necessary in NSW?
In New South Wales, strict compliance with local planning rules and building codes is required. Even so, not all building works are properly documented or approved. If unapproved changes come to light after settlement, purchasers may be responsible for costly rectification.
Title insurance can provide reassurance in such scenarios, particularly when purchasing older properties or where complete documentation is unavailable. That said, it’s not a legal requirement and may not be needed in every situation.
How Much Does It Cost?
Title insurance is typically a one-time payment based on the property’s value and location. For example, a policy on a residential home valued at $900,000 in NSW may cost around $900–$1,000.
Because it is a fixed, upfront cost with no ongoing premiums, some buyers view it as an affordable risk-management option, especially given the potential cost of legal disputes or remedial building works.
Should You Buy It?
Whether or not to take out title insurance depends on your circumstances. It’s important to weigh the benefits and limitations carefully. It is best to discuss your specific situation with your legal or conveyancing professional.
Our team at Castrikum Adams Legal works closely with Bangalow Conveyancing to provide full support during the property purchase process, ensuring legal protection and a smooth experience from start to finish.
To read more on this topic, click here. However, if you found this guide helpful, we invite you to check out our other blog posts.