Reducing your risk
Title insurance can cut the stress of buying property, reports Giuseppe Tauriello.
HAD Matthew and Tina Dorian not been informed about a form of insurance protecting them from risks associated with property ownership, they would not be living in their Seaton home.
Ms Dorian says property risk insurance, otherwise known as title insurance, clinched the deal for the family, relieving concerns about ownerships rights on their property.
‘‘We sold a house about a year ago and while we were going through that settlement process we found another house but had some concerns about an easement running along the boundary,’’ Ms Dorian says. ‘‘That was when we were told about title insurance. The insurance will cover us for any repairs should the council need to repair the easement.’’
Property risk insurance protects owners from issues including:
ILLEGAL or unapproved structures, such as pergolas and carports, that could result in an order to demolish or repair.
ZONING issues which prevent certain uses.
OUTSTANDING rates, taxes or levies for which the new owner becomes liable.
FRAUD or forgery resulting in a challenge to ownership of a property.
ENCROACHMENTS where a garden shed or fence encroaches on an adjoining property.
According to Conveyancing Matters marketing manager Penny Erskine, property risk insurance is different from most other forms of insurance as it can provide known risk protection as well as coverage against unknown risks.
‘‘During the process of buying a property, you or your conveyancer may become aware of an existing or potential issue related to that property,’’ she says. ‘‘Without property risk insurance, the purchaser has limited options - either negotiate a discounted purchase price or pull out of the contract. But with property risk insurance, the purchaser can simply take out a policy giving them protection against that risk should it cause a loss down the track.’’
Ms Erskine says property risk insurance is something to which buyers of older properties should pay attention, given the higher risk of property boundaries moving over time or building work having been completed without required approvals.
Statistics from Archicentre prepurchase home inspections show 44 per cent of weatherboard homes, 32 per cent of brick-veneer homes and 38 per cent of double-brick homes incorporate illegal building works.
First Title general manager Christopher Walker says property risk insurance provides coverage beyond the life of ownership.
‘‘This means that even after you sell the property, you are insured should there be a later claim,’’ he says.
PEACE OF MIND: Tina and Matt Dorian with son Lachlan at their Seaton home.