South Australian property owners are being encouraged to consider property risk insurance to protect against risks relating to the use or ownership of their property.
For a one-off premium, property risk insurance, also commonly known as title insurance, protects against issues such as:
• Illegal or unapproved structures (such as decks, pergolas and carports) that could result in the council ordering an owner to demolish or repair part or all of the home
• Zoning issues which prevent the property from being used for residential purposes
• Outstanding rates, taxes or strata levies on the property which the new owner becomes liable for
• Fraud or forgery resulting in a challenge to or loss of ownership of a property, or the home being mortgaged without the owner’s knowledge
• Encroachments where a garden shed or fence encroaches onto an adjoining property.
According to Conveyancing Matters Marketing Manager, Penny Erskine, property risk insurance is different from most other forms of insurance, as it can provide known risk protection as well as coverage against unknown risks.
“During the process of buying a property you or your conveyancer may become aware of an existing or potential issue related to that property, for example an extension to the property that hasn’t been approved by council,” she said.
“Without property risk insurance, the purchaser has limited options – either negotiate a discounted purchase price or pull out of the contract (if possible).
“But with property risk insurance, the purchaser can simply take out a policy giving them protection against that risk should it cause a loss down the track, providing enormous peace of mind.
“Property risk insurance is something that all home buyers and owners should consider, particularly those buying older properties where there is a much higher risk of property boundaries having moved over time, or building work having been done without the required approvals.”
Property risk insurance could be a protection against the very real threat of illegal building work.
Statistics from Archicentre pre-purchase home inspections show that illegal building work is prevalent among South Australian homes – 44 per cent of weatherboard homes inspected had illegal building works. A total 32 per cent of brick veneer homes had illegal work, and 38 per cent of double brick properties.
Property risk insurance is provided by companies such as First Title and can be taken out through a conveyancer at the time of purchasing a property or as an existing owner of a property.
First Title’s General Manager Business Development, Christopher Walker, said that property risk insurance was also unique in that the premium provided coverage for the life of ownership and beyond.
“This means that even after you sell the property, you are insured should there be a later claim,” Mr Walker said.
“The premium is determined by the value of the property and whether there are any known risks. A $450,000 house with no known risks would attract a premium of about $370, which is a one-off charge.”
• For further information contact Penny Erskine on 8210 0009 or 0409 695 365.
http://www.conveyancingmatters.com.au/
