Title insurance is an emerging insurance product in the Indian market. It provides aid to resolve ownership issues, frauds like forgery, past land title defects, etc. It offers greater confidence to home-buyers or owners, developers of residential projects, and real estate businesses. So, What are the benefits of a title insurance policy?
The following benefits of a title insurance policy are:
1. Fulfils the statutory compliance of RERA:
In order to bring uniformity in safety mechanisms and transparency in the real estate business, RERA has made it mandatory to buy title insurance for developers, constructors, landowners, etc. Title insurance adds a protective layer to the real estate business and it boosts easy real estate financing and credit facility.
If you are a developer or constructor or a homeowner having this insurance, you can get credit easily as it strengthens the value of your property as collateral. It becomes safe for developers and property owners to perform real estate transactions.
2. It covers Litigation Costs:
Title insurance triggers defense costs. As costly litigation costs can put a critical financial burden on you, title insurance helps you fight legal claims by bearing the cost of legal expenses such as lawyer’s fees, legal documentation expenses, settlement costs, etc. Some insurers also offer an out-of-court settlement. Unclear land titles, unpaid property taxes spousal claims on property discovered after purchase might invite huge financial costs in order to tackle such legal cases. Title insurance is a rescue plan in order to deal with such cases.
3. Handles disputed ownership claims:
When ownership comes into question, title insurance is the one-stop solution to handle claims against title defects such as past property title challenges or frauds, or unclear land titles. This title insurance policy protects homeowners during such contingencies.
Title insurance provides a financial shield against past ownership claims so it is a must-have insurance policy for home-buyers. In India, we do not have digital property records to check any title defect assumed in your buying property but this policy provides a helping hand to access track records and saves your property against ownership claims.
Also Read: What is Title Insurance? What does it cover?
4. Saves your time and cost:
Some insurance companies provide out-of-court settlement and other legal assistance to avoid legal property claims. Because property title claims consume hefty costs and a long haul of time is needed to resolve title defects. Title insurance helps in resolving disputed ownership or title defects and provides legal assistance to handle such claims. It is a one-time event and protects your property for a period of 7 years which is a cost-efficient trade-off to get a protection shield against title defects.
5. Adds a safety shield in residential projects:
Title Insurance aids the developers till the time of construction as past property frauds can be tackled if emerged during the construction time period. This insurance provides strong confidence to house financing companies which ultimately fosters collateral supporting credit. It also resolves a serious trust deficit in the real estate business and safeguards the investment mechanism in real estate. Title insurance adds value to the investment profile of the property.
Aman purchased a property, an unknown lien filed a claim because the previous owner is behind on his payment. In this case, Aman will bear the repercussions as debt stays with the property irrespective of who incurred it. A charge of lien on the property has been imposed and Aman as the new property owner is accountable for it. In such a case, title insurance saves you from legal expenses as defense costs is been reimbursed by the insurance company and complete legal support is also provided by the insurer’s end.
Title Insurance is a must-have insurance policy in order to ensure a good marketable title.