Buyer’s guide

Title insurance: what every buyer needs to know

Title insurance protects you against certain hidden title and property problems, like unapproved building works and boundary encroachments. Here is what it covers, what it doesn’t, and whether NSW buyers need it.

Title insurance is a one-off insurance policy that protects you against certain problems with a property’s title or legal status that existed before you bought it. Common examples are building work done without council approval, structures over the boundary, and title fraud.

Some of these problems can’t be found by normal conveyancing searches. This guide explains what title insurance covers, what it doesn’t, and whether it’s worth it when you buy in NSW.

Updated October 2026 to reflect current law.

What is title insurance?

Your “title” is your legal ownership of the land, as recorded on the NSW land register. Title insurance protects you if something about that title or the property’s legal status turns out to be wrong, and you lose money as a result.

Most insurance covers things that might happen in the future, like a fire or a storm. Title insurance is different. It covers problems that already existed when you bought, but that nobody picked up at the time.

Why can a problem be missed? Standard conveyancing searches only show what’s on official records. For example, a council won’t have a record of a deck that a previous owner built without approval. And most buyers don’t order a land survey, so a fence or garage over the boundary often goes unnoticed.

What does title insurance cover?

Every policy is different, so always read the policy wording. Most residential owner policies in Australia cover the following kinds of problems:

• Unapproved building works. If council orders you to fix or remove a structure a previous owner built without approval (such as a deck, pergola, carport or garage), the policy may pay for the work. This cover usually has a dollar limit set by the insurer.
• Boundary problems and encroachments. An encroachment is when a building or structure crosses the boundary between two properties. The policy may cover your loss if your structures sit over the line, or a neighbour’s structures sit on your land.
• Errors in property searches. For example, unpaid council rates, water rates or land tax that weren’t shown in the searches and weren’t adjusted at settlement.
• Fraud and forgery. For example, if someone forges documents to sell or mortgage your property.
• Legal costs. Many policies also pay the reasonable legal costs of defending your title against a covered claim.

These are general examples only. Whether a claim is paid depends on the facts and the exact policy terms.

What title insurance does not cover

Title insurance has clear limits. Policies usually exclude:

• problems you knew about before you bought, or that were disclosed in the contract for sale
• defects in the building itself, such as poor workmanship, cracking or termite damage (a building and pest inspection is the right tool for these)
• problems you created, such as works you carry out after you buy
• changes in planning or zoning rules after you buy
• environmental issues such as contamination, unless the policy says otherwise

This is why title insurance should sit alongside, not replace, a pre-purchase building inspection and a careful legal review of the contract.

Do you need title insurance when you buy in NSW?

NSW uses the Torrens title system. Under the Real Property Act 1900 (NSW), the land register is generally conclusive proof of who owns the land. This gives buyers strong protection.

If you lose an interest in land because of how the Torrens system operates (for example, through some kinds of fraud or a register error), you may be able to claim from the Torrens Assurance Fund, run by the NSW Registrar General. Claims generally must be made within 6 years of the loss.

But the Torrens Assurance Fund does not cover everything. It won’t pay for an unapproved deck or a fence on the wrong side of the boundary. Those are the gaps title insurance is designed to fill.

Your rights against the seller are also limited. The standard NSW contract restricts what you can object to, and after settlement it’s often too late to claim against the seller for many of these issues. You can read more in our guides to title defects in NSW and requisitions on title.

Title insurance may be especially worth considering if:

• the property has been renovated or extended, or has a granny flat, deck, pool or carport
• it’s an older property with older fences and outbuildings
• you aren’t ordering a survey report
• you want extra protection against title fraud

Benefits of title insurance

• Peace of mind. You’re protected against some costly problems that can’t be found before you buy.
• One-off cost. You usually pay a single premium. Cover typically continues while you own the property.
• Legal costs. Many policies cover the cost of defending your title against a covered claim.
• Cover for some people who take over from you. Many owner policies extend to certain people who later hold the property, such as a spouse or the beneficiaries of your estate. Check the policy for exactly who is covered.

Some lenders take out their own title insurance to protect their mortgage. That is a separate “lender policy”. It protects the bank, not you, so it’s worth asking about an owner policy too.

How do you get title insurance?

1. Ask your lawyer or conveyancer early in the purchase. They can arrange a quote from a title insurer.
2. Read the policy documents. Check what’s covered, the exclusions and any dollar limits, especially for unapproved works.
3. Arrange it before settlement. Residential owner policies are usually taken out at or before settlement.
4. Keep your documents. Store the policy with your other property papers so you can find it if a problem comes up.

Title insurance FAQs

How much does title insurance cost?

It depends on the insurer, the property value and the type of property. It is usually a one-off premium. Ask for a quote before settlement.

Is title insurance compulsory in NSW?

No. It’s optional for buyers. Some lenders arrange their own lender policy, but that protects the lender, not you.

Does title insurance replace a building inspection?

No. Title insurance generally doesn’t cover the physical condition of the building. You still need a building and pest inspection.

Can I get title insurance after settlement?

Residential owner policies are usually arranged before or at settlement. If you’ve already settled, contact an insurer directly to ask what is available.

Does title insurance cover things I already knew about?

Generally, no. Policies usually exclude problems you knew about or that were disclosed to you in the contract.

This article is general information only and is not legal advice. It reflects NSW law at the date of publication. Please contact us for advice about your circumstances.

Related guides