Is title insurance a rip-off in Australia depends on risk, but generally it is not a rip-off for many home buyers, though some experts say it is low value for cost. Title insurance in Australia is offered by First Title and Stewart Title, costing $300 to $1,000 one-off for residential property, covering unknown risks after settlement like fraud, forgery, illegal building works, unapproved structures, boundary errors, outstanding rates, and planning issues not discovered by conveyancing searches. Unlike US where title insurance is standard and expensive, in Australia it is optional and cheap, with premium about $500 for $500K property. Whether it is rip-off depends, if you buy old property with unapproved extensions, or if council records incomplete, title insurance can save $20,000 to $100,000 in rectification costs or legal fees. For example, if previous owner built deck without approval and council orders demolition, title insurance covers loss. Critics say conveyancing searches already cover most risks and title insurance has many exclusions like known defects and pest, so claim rate is low, about 2% to 5%, making it seem rip-off. However, for first home buyers and for properties with complex title, $400 one-off for lifetime cover is good peace of mind. It is not mandatory, unlike lenders mortgage insurance. So it is not rip-off if you have risk, but may be unnecessary for new apartment with full searches. Many conveyancers recommend it for $400.
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