Will Title Insurance be efficacious in India?

By Harmesh Madhyani, General Manager, Taxation, Finance & SAP – Raheja Universal

Traditional insurance policies protect the insured against losses and or damages. For example, a car insurance policy will cover the car repairs costs in case of accidents, and a health insurance policy will cover the costs towards the treatments n of an insured due to health problems.

However, title insurance is different as it protects the insured against claims for unknown defects of the past. Earlier this year Title insurance policy was made available for Developers in India, to embrace, a recoup policy which insures against financial misfortune due to claims against the title to land or property. Section 16 of the RERA Act entails developers to implement title insurance; nonetheless, it will be made mandatory after the regulator of each State notifies it. The concept of Title Insurance itself is new to the Indian Real Estate Business.

Title insurance like any other insurance policies helps you from unanticipated claims. However, the significant distinction which is additionally the favourable position is that title protection on your property is a one-time premium; there is no yearly premium to keep the policy in effect. It covers your real estate property as long as you or your heirs retain an interest in the property.

The title insurance policy available globally is primarily on two categories, Owner’s Policy and Lender’s Policy. In India, section 16 under RERA act only speaks about the owner’s policy. This indicates that India is in a nascent stage at developing insurance policies for the Real Estate sector.

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