Title Insurance - A Benefit for Home Buyers
Aug 14, 2018 Real Estate News
Title insurance is yet another step to ease home buyers and developers' woes right after the introduction of Real Estate (Regulation & Development) Act, 2016. The Act made it mandatory for property registration. Similarly, mandated title insurance is another step to protect your property against financial losses. Title insurance is a much-needed relief considering that real estate ownership/title issue is in large scale in India.
Defence cost: Insurance will cover proceedings challenged in court through litigation.
Out-of-court settlement: Includes compensation to the parties involved, provided that the petitioner is not a co-owner or a co-borrower.
Title Insurance Cover
In layman's language, this policy states that no defective title holder can pass on a valid title to the potential buyer. The policyholder or a prospective owner will get the protection of the property against any possible financial loss that may be due to defects, disputes or frauds. The policy has been designed by a 7-membered committee to safeguard real estate owners, lenders and investors regarding financial interest against property issues.Title Insurance covers the following
Defects in a title- Fraud, forgery, incompetency or impersonation
- Failure to have authority to a transfer of conveyance
- Document affecting claim executed under a falsified or expired power of attorney;
Defence cost: Insurance will cover proceedings challenged in court through litigation.
Out-of-court settlement: Includes compensation to the parties involved, provided that the petitioner is not a co-owner or a co-borrower.
The benefit to Home Buyer Through Title Insurance
The developer avails this insurance at the project start, and the developer pays the premium until the construction is over. Later, the policy is transferred to the Apartment Association with power of attorney and other required documents. After that, the title insurance is renewed by the registered authority of the project. Hence, home buyers are waived off the premium until the association is formed.Who are the Service Providers in India?
The concept of Title insurance has been borrowed from European and American markets. In India, this concept is pretty new, and therefore service providers will face challenging situations in collecting land details. In the European and American market, records are systematic, whereas in India all the records are either wholly manual or partially digital. Hence, at the initial stage, the cost borne by the insurer will be more, besides time involvement. As of now, Bajaj Allianz, as well as ICICI Lombard, are considering to offer reinsurance support. Also, another global service, Marsh is offering title insurance in collaboration with National Insurance Company Ltd and New India Assurance Ltd.Looking for property portal?
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