Newbie question: What is Title Insurance? Do we need it?

[nikkig]

Hi everyone,

We have purchased our first IP and our conveyancer has "highly recommended" taking out title insurance. I've tried searching the forums, but can't find much on it.

What is Title Insurance?

Can someone please explain it to me in plain English?

Is it worth taking out on a stand-alone house built in the early 70's that has had no extensions or modifications done to it?

Thanks in advance for your replies.

 

[Paul@PFI]

http://www.firsttitle.com.au/lenders/what-is-title-insurance

This insurance appears to benefit the lender not you. Like a reverse LMI. It insures lender from failed title or defects. Interesting it was under the "lenders" insurance products not the property owners tab. Doesnt make sense. Perhaps he needs the commission income ??

 

[Propertunity]

What is Title Insurance?
Can someone please explain it to me in plain English?

Discussed on the forum here many times. Have a read of:

http://somersoft.com/forums/showthread.php?t=80379

http://somersoft.com/forums/showthread.php?t=85638

....and if it's still not clear after that, do a further google search: site:somersoft.com "propertunity" "title insurance"

 

[nikkig]

Thanks for your reply Propertunity.
The information the Conveyancer gave us was for a Strata title, but our purchase is torrens. I've been on the stuarttitle website and have seen that they provide cover for torrens too and have emailed the conveyancer asking for confirmation that the title insurance they will sell us is for torrens.
I still don't quite understand it and don't think we'd come across a problem....but I guess that's what the insurance is for...the unknown.
I think we'll take it out just for the SANF.
Thanks for the pointing me in the direction of the other discussions.

 

[Terry_w]

If there is a problem with title you could hand over the money but.not be able to register as owner.

 

[LexCon]

It does not matter whether it is strata title or not they offer policies that cover both. Title insurance covers many things like if after you purchase the property and the people next door knock on your door and tells you you side fence is 3 meters inside their property or the council call and tell you to pull down the garage as it was built without a permit. The insurance company offers you cover for risks such as these and many more for the price of their premium.

I suggest you contact the insurance company direct and ask them any questions you may have.