Title Indemnity Insurance: What It Covers and When You Might Need It

Property transactions often uncover unexpected legal issues linked to the title. Missing documents, outdated boundaries, or unknown rights of way can all delay completion. Title indemnity insurance helps protect against financial loss if such defects come to light.

This guide explains what the cover includes, when it’s typically required, and how it works. Title insurance is usually arranged by your solicitor. Once the legal risks are resolved, insurers like rivr can provide full home and contents cover.

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What is title indemnity insurance?

Title insurance, also referred to as a title policy, protects buyers, owners, and lenders from financial loss caused by defects in a property's legal title. If a hidden issue arises after purchase, this type of policy helps cover the cost.

In the UK, title insurance is usually arranged by solicitors through specialist providers such as Stewart Title or CLS. It is not a standalone product like buildings or contents insurance but plays a key role when legal risks threaten to delay or disrupt a property transaction.

Why it matters

Title defects can have serious consequences. They may block a sale, reduce a property's value, delay a mortgage loan, or lead to legal disputes and extra costs.

Even thorough title searches can miss issues such as outdated information in Land Registry records or undisclosed easements. These might include missing deeds, unregistered rights of way, or outdated records. One example is undisclosed heirs who could later claim interest in the real property.

This is why title insurance is required in many cases before a lender will release funds. Buyers and sellers benefit too, as cover provides reassurance that the transaction can proceed.

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How do title indemnity policies work?

Title policies are usually specific to a single legal defect. They are a form of indemnity insurance, meaning they provide financial compensation for losses caused by known legal risks, rather than fixing the issue itself.

Common outcomes covered include:

• Loss in value due to a legal defect
• Legal defence costs and settlements
• The cost of securing missing permissions or rights
• In rare cases, the cost of remedial works ordered by a local authority

There are two main types of policy:

An owner’s policy protects your equity and ownership interest in the property.
A lender’s policy protects the mortgage provider, typically up to the value of the loan.

Title policies are one-off purchases and usually remain valid indefinitely. They are often transferable if the property is sold.

How the cover is arranged

During due diligence, your solicitor will conduct title searches, reviewing deeds, Land Registry data, local authority responses, and planning history. If they find a material risk to ownership or saleability, they will recommend a title policy.

The insurer then assesses the risk, sets a premium, and defines a limit of indemnity. This is usually linked to the property’s value or indexed over time. For lenders, it reflects the mortgage loan amount.

Most policies come with conditions. These may include avoiding contact with third parties, not making changes that affect the defect, and notifying the insurer immediately if something changes.

These terms help preserve the cover and ensure a smooth claims process if needed.

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When might you need title insurance?

Title issues can surface during standard checks in real estate transactions. Common examples include:

Missing deeds or title documents

If crucial paperwork proving ownership or past transfers of the property is missing, you may struggle to prove legal ownership.

Without these records, a buyer or lender might refuse to complete the deal. A title policy protects you from any financial loss caused by these gaps.

Unapproved building works

Previous owners might have carried out building alterations, like loft conversions, extensions, or garage modifications, without obtaining building regulation approval or planning permission.

Local authorities could require remedial work or even order you to remove the structure. A policy ensures you’re covered for those costs if this happens.

Restrictive covenants

These are old conditions attached to a property’s title that can limit what you can do with it. For example, prohibiting extensions or certain types of business activity.

Breaching these covenants can lead to legal action or expensive settlements. Insurance can cover the legal fees and any resulting financial damages.

Unknown rights of way or easements

Someone else may have a legal right to cross your land, lay pipes, or access shared spaces, even if you were unaware.

These rights can devalue your property or disrupt plans. Title indemnity insurance can protect you from losses if such easements surface after purchase.

Boundary disputes

The Land Registry’s plans don’t always match the exact layout of your garden, driveway, or outbuildings.
If a neighbour disputes where the boundary lies, you could face legal costs to resolve it. Having insurance can reduce the stress and expense associated with defending your position.

If your solicitor flags one of these potential issues, they’ll usually explain why the risk could delay or derail the transaction.

Because a lender’s loan is tied to the property’s value, they may also ask for a title insurance policy, which is typically required before funds can be released. Taking out a policy helps all interested parties (you, the seller, and the lender) move forward confidently without unexpected financial setbacks.

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What does title insurance cover?

A typical owner’s policy or lender’s policy protects against specific legal risks, such as:

Unknown easements or rights of way

These are legal rights allowing others to use part of your land for a specific purpose, like walking across it or laying utility cables.

You may not even know these rights exist until you’re prevented from using your own property as you planned. Title insurance helps protect you from any resulting loss in value or legal costs.

Breaches of restrictive covenants

These are conditions on the property’s title that limit what you can do, such as building extensions or changing its use. If you unknowingly breach one, you could be sued or forced to reverse the work.
A policy covers the costs of defending your position and settling any claims.

Defective leases or missing title deeds

Lease agreements or historical ownership records might be incomplete or flawed, making it difficult to prove clear ownership of your property. If a defect affects your ability to sell or remortgage, the policy pays for legal fees and any financial loss.

Missing planning or building regulations approval

Past alterations to the property may not have the correct permissions, which could lead to enforcement action from local authorities.
Insurance covers the cost of dealing with these issues, including fines or remedial work.

Unclear property boundaries

If it’s unclear where your property begins and ends, disputes with neighbours can arise.

This can cause delays in future real estate transactions and reduce your property’s market value. Title indemnity insurance covers the costs of resolving the disagreement.

Unknown adverse possession claims

Someone could try to claim ownership of your land if they’ve occupied it without your permission for a certain period.

This type of claim can be complex and expensive to defend, so having insurance in place protects you from those costs.

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What’s not covered?

Title insurance offers financial compensation, but it does not resolve the underlying legal defect. If you want to correct the issue itself, such as applying for retrospective planning permission or negotiating a release of restrictive covenants, this would need to be handled separately and at your own cost.

Ask your solicitor to explain the policy terms, including what is and isn’t covered. They can explain what’s included, what isn’t, and whether you might need other forms of protection to cover potential issues.

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Who pays for title indemnity insurance, and how much does it cost?

In the UK, there’s no hard‑and‑fast rule about who pays for title indemnity insurance. The responsibility usually depends on who stands to benefit the most or whose solicitor identifies the issue during the conveyancing process.

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How much does it cost?

The title insurance cost is a one‑off payment made at the time the policy is arranged, and it’s generally affordable compared to the size of the transaction. Prices are usually linked to the purchase price, the loan amount, and the level of risk.

• For a lower‑value residential property, premiums can be as little as £50–£100.
• For higher‑value real estate or complex property investment deals, premiums can rise to several hundred pounds or even more.
• Policies covering multiple risks, or those with higher indemnity limits, will cost more.

One of the key benefits is that title indemnity insurance is not an annual premium; it’s a single payment that provides indefinite cover, even after you sell the property.

That means the next owner can often inherit the policy at no extra charge, which makes it attractive to interested parties like buyers and lenders.

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Are there other costs?

Aside from the premium, there are usually no additional fees. However, keep in mind that if you need your solicitor to arrange the policy on your behalf, they may charge a small administrative fee.

When you factor in the size of the property purchase and the potential losses you could face without insurance, most homeowners and lenders find the cover to be highly cost‑effective.

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How do I arrange title indemnity insurance?

Arranging a title indemnity policy is straightforward, and your solicitor or licensed conveyancer will usually handle the entire process for you. Here’s how it typically works:

1. Your solicitor identifies a potential issue

During the conveyancing process, your solicitor will review public records, Land Registry entries, and local authority searches.

If they uncover a problem, such as missing deeds, unapproved building works, or unclear property boundaries, they’ll let you know that title indemnity insurance is recommended.

Because these defects can cause delays or even stop the deal entirely, the policy is often typically required by lenders before funds are released.

In many cases, this will include arranging a lender's title insurance policy to protect the lender’s financial interest.

2. Details are shared with a title insurance provider

Your solicitor will contact a reputable title insurance provider or title insurer and give them the necessary information about the property and the specific defect.

They’ll also provide copies of relevant documents (e.g. title documents, leases, or plans) so the insurer can fully understand the risk.

3. The insurer assesses the risk and sets the premium

The title insurance industry relies on underwriters who assess the level of risk associated with your property.

They’ll look at the property type, location, purchase price, and any potential impact on property rights or value. The insurer then sets the premium (the one‑off cost you’ll pay for the policy).

4. Policy terms are agreed

Before finalising the policy, your solicitor will explain the terms and exclusions. It’s important to understand what the policy does and doesn’t cover, including the limit of indemnity (the maximum amount the insurer will pay if you make a claim).

This is often linked to the loan amount for a lender’s policy or the property’s full market value for an owner’s policy.

5. Cover is issued quickly

One of the biggest advantages of title indemnity insurance is how fast it can be arranged. In most cases, your solicitor can have the policy issued within a day, ensuring the transaction stays on schedule.

Once the premium is paid, cover starts immediately and continues indefinitely.

Why it matters

Having the right title indemnity insurance in place reassures all interested parties involved in the transaction: buyers, sellers, and mortgage lenders.

It prevents last‑minute delays, protects your homeowner’s equity, and allows the deal to complete smoothly without major disruptions.

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Limitations and exclusions

While title indemnity insurance provides valuable protection, it’s important to understand what it doesn’t do.

This type of policy is designed to protect you financially, but it does not fix the underlying problem with the property’s title.

For instance, if you discover that past building work was done without planning approval and you’d prefer to correct the issue, you’d need to take separate legal action and pay any associated costs beyond what the policy covers.

Here are some of the most common limitations:

It’s also worth noting that the amount paid out will usually be capped at the purchase price or the loan amount for a lender’s policy. That means the insurer won’t cover losses beyond the agreed limit, even if your property’s value has increased.

To avoid any surprises, ask your solicitor to go through the terms in detail and highlight any gaps. They’ll explain whether you might need other forms of insurance or additional legal steps to fully protect both you and other invested parties involved in the transaction.

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Case studies and examples

Example 1: A homeowner discovered an undisclosed right-of-way on their land just as they were about to sell. The buyer’s mortgage lender required a title policy from a title insurance company. The policy covered the potential loss in value and legal costs, allowing the real estate transaction to proceed without delay.

Example 2: A buyer purchased a property with a loft conversion, later learning that no building regulations approval existed. The policy covered the legal fees when local authorities intervened, protecting both you and the buyer’s homeowner's equity.

Conclusion

Title indemnity insurance is an effective way to protect yourself from unexpected title issues that could disrupt a property sale or purchase. It offers financial reassurance for buyers, sellers and lenders, and can often be arranged quickly for a one-off cost.

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rivr cover: High value home insurance built around you

We’re a digital-first home insurance provider specialising in homes with distinctive architecture, bespoke renovations, or high-value contents. While title indemnity cover is arranged by your solicitor, we step in once ownership is confirmed to provide comprehensive buildings and contents insurance.

rivr does not offer title insurance, but we work closely with solicitors and advisers to ensure your home is fully protected from day one.

Get in touch to see how we can help.