Residential Title Insurance offers valuable protection from many unexpected hazards of home ownership — from unknown encumbrances to errors on public records. But while it may be a good safety net for buyers and owners, it’s not a catch-all solution. Like any insurance policy, Title Insurance has limitations you should be aware of. For example, the policy terms may exclude claims under certain circumstances. It's just as important to understand what Title Insurance doesn't cover as it is to understand what it does. Here we'll look at some of the exclusions, explain why they exist and provide you with a realistic understanding of what's covered in your policy.
Why Title Insurance Exclusions Matter
Title Insurance is highly effective against a number of unforeseen ownership risks that relate to the title on your property, but keep in mind: no policy is limit-free. Knowing "what your Title Insurance doesn't cover" can save you from a costly surprise in the future.
Just as with house or vehicle insurance, Title Insurance will cover some risks, but not all of them. Being aware of its exclusions enables you to make informed decisions, manage your risks and, if needed, take additional advice or protection.
First Title’s Title Insurance Exclusions
Physical Property Damage & Wear
Title Insurance from First Title is designed to protect against many of the hidden risks affecting ownership or title. It doesn’t cover physical damage to the property or issues that arise from everyday wear and tear, which is more commonly covered under home owners insurance. Some example of risks not covered under Title Insurance include:
- Damage from rust, mould or water over time
- Deterioration due to poor maintenance
- Structural issues or design flaws
- Gradual damage not related to title defects
Risks You Create or Knowingly Accept
If you were aware of a title issue before purchasing the property, or if you’ve caused or accepted a risk yourself, Title Insurance won’t apply. The policy is there to protect against unknown risks, not those you knew about or caused, such as:
- Title issues disclosed in reports or contracts that you accepted
- Building or renovation work you’ve done without approval
- Causing a title issue through your own actions
- Buying a property with known risks, expecting insurance to cover them
Government Laws and Actions
Title Insurance from First Title doesn’t cover losses that result from changes in government laws. This includes things like rezoning changes that existed prior to the policy date and were known to the purchaser, compulsory acquisitions or fines. Other examples outside the scope of Title Insurance include:
- Loss due to new planning laws or zoning changes occurring after the policy date
- Government acquisition of land (e.g. for infrastructure projects)
Title Structures Not Covered by a Residential Policy
First Title’s Home Owners Gold Title Insurance policy is designed to protect the legal ownership and use of residential property, but it doesn’t extend to every type of title. Certain complex or high-risk ownership structures — such as company title or leasehold interests — aren’t covered under a standard residential policy. However, they may be covered under a Commercial Title Insurance policy from First Title. Please contact us if you want to learn more about this product.
The below ownership types carry unique legal risks and are excluded from standard cover:
- Native Title
Refers to land rights held by Indigenous Australians under traditional laws and customs. Title Insurance doesn’t cover any claims or interests arising from Native Title. - Company Title
Ownership is held through shares in a company that owns the building. This structure involves corporate rules and shareholder agreements, which fall outside the scope of a residential Title Insurance policy. - Moiety Title (SA)
A shared ownership structure is mostly found in South Australia, where two parties co-own land and improvements. Legal complexities in shared rights and responsibilities make this title ineligible for cover. - Purple Title (WA)
Unique to Western Australia, this involves shared ownership of land for properties like villas or grouped dwellings. These arrangements are not recognised as standard titles under First Title’s policy.
These structures can involve unique legal and financial risks that fall outside the scope of First Title’s protection.
Recap: What Title Insurance Does Cover
Title Insurance from First Title is designed to protect property buyers and owners from many unknown or unforeseen risks that could affect their legal ownership or use of the land. It’s not for physical damage or known issues — it’s about legal risks that often come to light only after settlement.
Typically covered risks include:
- Illegal Building Work by Previous Owners
Unapproved structures or renovations done by past owners that have led to council action or legal issues. - Unknown Encumbrances
Hidden restrictions or interests on the title (like an unregistered easement) that weren’t disclosed before settlement. - Errors in Public Records
Mistakes in land titles, plans or property searches that affect your ownership or legal rights. - Fraud and Forgery
Losses from fraudulent dealings in the title, such as forged signatures or impersonation in past transfers.
How First Title Helps You Stay Protected
When you choose First Title, you’re backed by a policy built for confidence and long-term peace of mind:
- Professional support from an experienced Australian team
Get covered by local experts who understand Australian property law. - One-off premium for as long as you own the property
Pay once and stay protected - no annual renewals, no hidden fees.
To learn more about Title Insurance exclusions and what you could be covered for, you can read our full Title Insurance guide, get a quick Title Insurance quote or request Title Insurance coverage today - it’s fast, simple and built to give you lasting peace of mind.
