Title Insurance - has anyone got it?

[donna]

Hi All,

Has anyone taken out title insurance?

Here is a description of what it is:

Put simply, title insurance is a contract that protects the owner of an interest in land for that interest. These interests may be described as "title" risks and "off title" risks and may arise through the operation of a variety of laws affecting real property - Acts of Parliament, Regulations made by Order in Council, Local Authority by-laws or the application of common law rights - or through the conveyancing process itself.
One of the significant benefits of a title insurance policy is that the insurer assumes a "duty to defend" and the responsibility and the attendant costs of resolving a property law problem are passed to the insurer. Internationally between 45% and 50% of all payments of claims under title insurance polices are to lawyers to cover the costs of resolving a problem covered by the policy.
In many respects it is like a prepaid legal agreement to solve problems - at the expense of the Title Insurance company. It is also protection against a range of risks that could not be determined from a title search alone.

Source


And if you have got it - have you ever made a claim?

Cheers,

Donna

[Green Fish]

That type of cover might have something going for it in the UK, but in NZ or Oz, it's a waste of money. It would make as much sense to pay for "Giant Asteroid Hitting Earth" insurance. Our system of land ownership is based on the principle that what's on the register is what counts. So you get your own free insurance simply by searching the title. (And you can get cheap government insurance by paying a few more dollars for a guaranteed search - in case something turns up on the register just after you do your search.)

[Xav]

(And you can get cheap government insurance by paying a few more dollars for a guaranteed search - in case something turns up on the register just after you do your search.)

Actually it doesn't even cost anything extra now.

I agree with GF, it wouldn't be worth taking out.

Probably the only risk (outside of fraud) is losing land to government departments (eg. road widening) which is covered by its own set of rules and probably wouldn't be covered by title insurance anyway.

Does anyone know of anyone actually offering title insurance in NZ?

[donna]

Apparently these guys - First Title are offering it and I wondered when it would be worthwhile to have it - here in NZ. If anyone did have it and any claims been made and for what?

Cheers,

Donna

[Green Fish]

I note that they publish the full policy wording on their website, which is usually a good sign when considering insurance companies.

And they also publish their premiums: $225 per annum for a 500k property.

Although I compared the cover to "Asteroid Hitting Earth" insurance, I note that the policy covers unauthorised structures and Waitangi Tribunal claims. They are real issues for a number of owners. The number may be small, but the issues, when they emerge, are large.

Given the small premium, it is worth considering. My main issue would be the ability of the insurer to meet a claim. The insurer, despite its name, is an Australian-registered company. It might be a company with limited assets and with no guarantees from a giant US insurer. On the other hand, it might not.