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In order to respond to the requirements of real estate developers and retail property buyers, IRDAI (Insurance Regulatory and Development Authority of India) has instructed general insurance companies to launch title insurance products. Wait, Wait. Title Insurance?
Yes. It's a form of indemnity (security or protection against a loss or other financial burden) insurance that safeguards a property buyer against financial losses arising from defects in title to real property.
Such a policy is retrospective, meaning the insured is protected against losses arising from shady events that occurred prior to the date of the policy's issue. Health insurance folks - hint, hint.
And Who Needs This?
FYI, there are a few existing title insurance products in the Indian market, but IRDAI has added to them a new and badly needed clause.
Taking into account the need for legal protection for developers in the early stages of development of a project and safeguarding the interests of the buyers, there was a need to expand the current title insurance products to cover all stakeholders in the built eco system.
Title Insurance cover can soon be individually bought by property buying customers for a desired duration, which was earlier available for eternal time periods only, translating into more peace of mind at a reasonable cost.