August 16 2018
Insurance is generally acquired by people for financial protection, and you might also be aware of different kinds of insurance policies, like car insurance, house owners insurance, etc. However, do you know there is a separate insurance policy called ‘Title Insurance’ which you need to obtain when you buy a house/residential property?
To own a house/residential property, a title insurance is necessary in order to protect it from any unknown claims made to your ownership. When your hard work has finally paid off and your dream of buying a home is fulfilled, there shouldn’t be an obstacle in acceding to it. A registered Title Insurance shields your property/home from any legal issues occurring in the future.
Let us go more detailed about it.
A title insurance is a registered document you get when there is a transition of property from one hand to another. A change in the title happens each time a property is exchanged. To protect the investors or homebuyers, the insurance company vows to compensate the buyers in case of any loss incurred or any defect in the title while buying it from the seller. Why is the Title Insurance Gaining Significance in the Recent Past?
Following the disputes that arose in the real estate market due to a lack of transparency and unclear titles, the Real Estate Regulatory Authority (RERA) has mandated builders and investors to adopt the title insurance for a property. The law mandates such that “Section 16 of the RERA Act, 2016 requires the real estate developers to buy a title insurance for all new and incomplete projects as on date”.
Making a title insurance mandatory helps you get benefitted from the insurance company in case of any loss in the realty market value or a deformity in the property title procured by you. It will bring the transparency and is mutually beneficial for developers as well as buyers.
A clear title is always necessary to denote your ownership of the property. The following illustration will help you better understand the importance of buying a title insurance.
Suppose you buy your dream home without being aware of the property taxes and that the previous owner from whom you bought the home hadn’t paid the taxes for several years, you are solely responsible and liable to pay those taxes charged against that property. It may even cost your home. Buying a title insurance will help you prevent these kinds of instances and retain your ownership fully.
Title Insurance Not a Big Deal
Buying a Title Insurance doesn’t cost you much. You just have to pay a one-time fee and that’s it, your property is covered for as long as you possess it. As of now, only a couple of companies have launched the title insurance policy since it is a new concept in our county. HDFC Ergo and New India Assurance are providing title insurance for different kinds of projects. The title insurance companies cover the expenses incurred for the insured part and protect it from any legal proceedings.
In this competitive world, buyers should be aware of all the deals of purchases made, might it be small or large. Big-ticket items like a residential property or house require an extra vigilance before investing. Buying a title insurance for your new home/ property will prevent you from facing any legal proceedings in case of a defect or loss in the market value. To protect yourselves and your property from any loss in the housing market, buying a title insurance is indeed necessary.