What is a Home Owners GOLD policy?
First Title’s Home Owners GOLD policy is an insurance
policy providing protection to a purchaser (or existing home owner) against a
range of property risks affecting the ownership or use of the property. It is a
specialty form of insurance called “Title Insurance”.
During a conveyancing transaction a Conveyancing Practitioner will work
diligently on behalf of the purchaser to identify risks that may affect a
property being purchased. The purchaser relies on the Conveyancing
Practitioner’s skills, as the purchaser will want to know they are acquiring a
property free from risk. Conveyancing Practitioners may find matters that could
affect use of the property in the future and potentially cause problems (such as
illegal building work or encroachments); however, there are also risks that the
most diligent process cannot discover.
First Title’s Home Owners GOLD policy protects
purchasers and existing owners of residential property against identified or
‘known’ and unidentified or ‘unknown’ risks that could cause stress and
financial loss in the future. In effect, it insures over the property title due
diligence process and if a purchaser suffers a loss, they simply make a claim.
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What are ‘known’ and ‘unknown’ risks?
‘Unknown risks’ are risks that are not identified during the Conveyancing
transaction before settlement but that may arise during property ownership and
cause financial loss to the owner. ‘Known risks’ are any risks disclosed by the
vendor or otherwise discovered by the purchaser prior to settlement (eg.
Building works completed wi‘Unknown risks’ are risks that are not identified
during the conveyancing transaction before settlement but that may arise during
property ownership and cause financial loss to the owner. ‘Known risks’ are any
risks disclosed by the vendor or otherwise discovered by the purchaser prior to
settlement (eg. building works completed without council approval, an
encroachment by the neighbour on to the land being purchased, or an extension
having been built of a utility easement). If there are no known risks evident a
policy will be issued for ‘clean title’.
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What does a Title
Insurance policy typically provide coverage for?
A typical home owner’s policy protects against the following risks – which
commonly give rise to claims:
Fraud or forgery resulting in a challenge to your ownership;
Fraud or forgery resulting in your home being mortgaged without your knowledge;
Any issue that would have been revealed in an up to date survey, with NO
LIMITATION as to boundary walls or fences;
Zoning issues which prevent you from residing in your house
Outstanding rates and taxes on the property which you become liable for as owner
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Who uses Title Insurance?
A growing class of Title Insurance users in Australia and New Zealand are people
purchasing homes, or who already own homes.
As the value of properties have soared, faced with growing risks such as fraud or
forgery, illegal building works and other title defects that are more likely to
have a significant financial impact, Title Insurance offers numerous benefits.
Under the traditional conveyancing process, where a defect in title is
discovered, a purchaser’s options can be categorised loosely as follows:
- if before exchange of contract, the purchaser can choose not to proceed or try
and negotiate a reduction in the purchase price;
- if after exchange, the purchaser may have a right to rescind (in limited
circumstances) or to claim compensation.
With Title Insurance, the purchaser has a further option. For the first time in
Australia, a purchaser can now take out insurance cover in respect of a known
title defect.
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What does Title Insurance do?
Title insurance is a viable solution to numerous issues that might present
themselves in a conveyancing transaction:
- The most important thing title insurance does is to give the Conveyancing
Practitioner a wider range of options in helping clients to find practical, safe
and financially efficient ways of managing their transaction.
- Title insurance can offer protection in respect of known risks.
- Title insurance offers protection over key risks such as illegal building
structures.
- It can offer a quick route out of otherwise time consuming (important with fixed
fees) problems.
- It offers reassurance to clients that someone else will meet the costs of
defending their title should problems ever arise and will compensate them if the
title cannot be defended, without the need to prove negligence.
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What does Title Insurance not do?
It doesn’t replace a competent Conveyancing Practitioner. Title insurance allows
the Conveyancing Practitioner to transfer some of the labour and liability for
some aspects of title examination, but still requires the Practitioner’s input.
However, it does mean that the typical suite of property investigations (that
can be quite expensive) are not necessarily required, title insurance providing
protection in lieu of those inquiries leading to a potential cost saving for the
purchaser.
Title Insurance cannot deal with non-title matters such as contamination – and
the purchaser needs to look carefully at the policy wording to understand the
terms, conditions and exclusions – which may vary from title insurer to title
insurer.
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How much does a home owner’s Title Insurance Policy cost?
Title Insurance is inexpensive. The premium is a one-off low cost payment
that protects the purchaser for the life of ownership.
Click here to download the premium schedule
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How do I purchase a Title Insurance policy?
For a new property purchase, simply contact your Conveyancing Practitioner to
request a Title Insurance policy from First Title.
The policy will then be provided to you together with an invoice requesting
payment which is required within 7 days of settlement.
Click here to download the Home Owners GOLD order form
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I already own my home, can I still be insured?
Yes, First Title offers Existing Home Owners GOLD as
protection for a property which is already owned. You’ll receive the same types
of protection against fraud and forgery and ownership rights. Simply contact
First Title on 1300 362 178 to arrange a policy
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Does your policy cover pest & building inspections?
No, it doesn’t – this is specifically a policy designed to cover title defects
and ownership issues.
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How long does a policy last?
A policy is valid for the life of ownership of the insured property.
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