What is title insurance?
Title insurance is a form of indemnity insurance that protects a potential property owner against loss from a bad title to property. So far, the Insurance Regulatory and Development Authority of India (IRDAI) has registered some title insurance products. In September 2021, the (IRDAI) issued a circular on title insurance. According to the circular, IRDAI has constituted a working group to suggest, inter alia, product construct and policy wording for two new products in addition to the existing products – Promoter Legal Expenses (Defence Cost) policy and Allottee/Individual Buyer Retail policy.
While the Promoter Legal Expenses policy indemnifies the insurer against legal defence costs only against suits challenging the title of the project, the Allottee/Individual Buyer Retail policy is designed to indemnify the insured against loss from a defect on title of property.
Both these new products safeguard against possible disputes that may arise in respect of the title of the property, relatively reducing the risk factor involved in real estate transactions and accelerating real estate investment.
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