IRDAI has recently constituted a working group that submitted a report related to the product structure of title insurance to develop a standard product and recommend measures to spur demand for the product.
The panel has recommended a comprehensive cover for all promoters, allottees and successors. Besides, it also recommends a promoter legal expenses policy (additional option at the time of the start of financial appraisal of the project) and an allottee retail policy (additional option for the end-user individual buyer of the property unit).
According to the draft proposal, the working group has submitted its report in which it has made various recommendations, including the two new product structures for title insurance (promoter legal expenses policy and allottee retail policy).
When it comes to an allottee retail policy, it means title insurance may soon provide coverage to the retail individual buyer. They will get this coverage at the time of the property possession. The sum insured offered to them will be equal to the purchased value of the unit. As per his/her own choice deemed fit to his requirements annually/long term three years’ options. The premium can be paid in full or installments as may be decided by the insurer, said the draft proposal.
The draft proposal further stated that a loan policy provides no coverage or benefits for the buyer/owner so the decision to purchase an owner policy is independent of the lender’s decision to require a loan policy.