Title Insurance

Title insurance is a one-off insurance policy that covers losses arising from defects in the property's title that were unknown at the time of purchase. In New Zealand, it's offered by specialist providers such as First American Title and Stewart Title.

Title insurance can cover a range of risks including unknown easements or covenants, boundary disputes, fraud or forgery on the title, building work without proper consents, and issues that would have been revealed by a survey. It can also cover some risks that a standard LIM or title search might not uncover.

Unlike most insurance, title insurance is paid as a single premium at the time of purchase and covers you for as long as you own the property. Premiums are relatively affordable — typically $300 to $1,500 depending on the property value and level of cover.

Title insurance is not a substitute for proper due diligence — you should still get a LIM, building inspection, and title review. However, it provides an additional safety net for risks that even thorough due diligence might not uncover.

Title insurance is particularly worth considering for cross-lease properties (where flats plan issues can emerge), older properties (where consent history may be incomplete), and properties where you're under time pressure and can't complete all investigations before going unconditional.

Ask your lawyer about title insurance options when you're buying. They can recommend a provider and arrange the policy. Compare the cover offered by different providers, paying attention to exclusions and the claims process. The premium is typically paid at settlement.