New Delhi: HDFC ERGO, country’s third largest non-life insurance provider in the private sector, launched the ‘Title Insurance Policy’, a first of its kind product in the private insurance segment in India.
This specialty insurance product provides Indemnity to property developers and the subsequent owners of the property against losses and risks related to defects in Property Title arising out of Third Party challenges not discovered prior to the commencement date of the policy due to the Title of Property belonging to someone other than the Insured, Descriptions & Plans in Historic deeds of the property being inadequate, Historic transaction being subject to an act of fraud or forgery by a third party that adversely affects insured’s rights over the title of the property, Title to the Property being subject to Unknown Burdens or Discharge of Burdens which may have been imposed in historic deeds executed prior to the commencement date etc.
Legal Costs also Incurred in the Policy
Moreover, defence costs / Legal costs incurred are also covered under the policy. Also, certain known defects in the title may also be covered under the policy by specific underwriting assessment for an additional premium.
The product has been developed stemming from the requirement of the Real Estate Regulation and Development Act 2016 (RERA), which mandates the purchase of Title Insurance for all new and ongoing property developments registered with the regulatory body.
Commenting on the launch of the new product, Anuj Tyagi, Executive Director & Chief Distribution Officer, HDFC ERGO General Insurance Company, “We are always looking at opportunities to offer protection to the customers from any unforeseen financial losses. Title insurance is one such innovative product that will provide customers’ the peace of mind from Title risks related to the land on which the property rests. It is crucial and a must-have, for developers not only because it is mandatory but is as an effective risk transfer mechanism.”
Developers to be benefitted
This new Title insurance policy will prove beneficial to real estate developers, property investors and housing finance companies. The policy can be obtained by developers and is subsequently assigned to the association of allottees or allottees /members of the housing societies, who are the ultimate beneficiaries of the policy.