HDFC Ergo launches Title Insurance – Should you opt?

HDFC Ergo launches Title Insurance – Should you opt-minHDFC Ergo launches Title Insurance – Should you opt?

Every time when a property changes hands, there is a change in the title too. Somewhere in the chain of transmission of property, certain faults arise and there observe a defect in the title of the property. The issue of ownership or title is a big problem in the real-estate industry. Keeping this problem in mind, HDFC Ergo, India’s third-largest non-life insurance company launched Title Insurance Policy. What is Title Insurance in India?  What are the benefits of Benefits of HDFC Ergo Title Insurance? What are the precautions to be taken while buying such title insurance plans? Should you opt for HDFC Ergo Title Insurance?

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What is Title Insurance?

The word ‘title’ refers to a person or persons who have legal ownership and the right to use a piece of land. Title insurance is an indemnity insurance, which protects the holder from any financial loss that stands from the fault in the title of a property. In simplest words, title insurance is an insurance made against any loss caused as a result of the defect in the title of the property. Unlike other insurances, it has retrospective effects where the insured is protected against losses arising from the events that occurred prior to the date of issuing the policy.

Today, anybody can bring a stay on the ongoing project by raising a legal objection on land titles even at the stage where the construction of the building has reached its advanced stage. Title insurance will bring a systematic approach to the development of the sector. It not only safeguards the buyer’s interests, but also ensures timely completion of projects. As per the regulations of RERA, the developer has to provide a written affidavit to the buyer stating that the legal title of the land of the proposed project will not be delayed in construction on the grounds of the title dispute.   

About HDFC Ergo Title Insurance

The general insurer of a private sector, HDFC Ergo launched a title insurance policy couple of weeks back. It is the first of its kind in the private insurance segment. Under this offer, it will offer cover to property developers and the subsequent owner of the property against losses and risks related to the fault in property titles arising due to third-party challenges, which were not discovered prior to the commencement of the policy due to different ownership. The policy also promises to indemnify against an act of fraud or forgery by a third party protecting insurer’s right over the title of the property.

The emergence of this product can be attributed to the requirement of the Real Estate Regulatory and Development Act, 2016 that has made it mandatory for the new and ongoing property developments to get title insurance. At the time of sale, the benefit of insurance has to be passed to the buyer.  Like the policy is obtained by developers and subsequently assigned to the association of allottees or members of a housing society who are the ultimate beneficiaries of the policy.

Benefits of HDFC Ergo Title Insurance

The major benefits of HDFC Ergo Title Insurance are:

1) The title insurance will majorly benefit the property developers, real estate developers, and housing finance companies. It relatively reduces the risk factor involved in the real estate transactions. 

2) The policy not only covers ownership issues, but also inadequate descriptions and plans in historic deeds of the property, fraud transactions to a third party that adversely affects the insured’s rights over the title of the property. 

3) Defense costs or legal costs incurred for this purpose are also covered under this insurance.

4) It accelerates real estate investments.

5) It makes the due diligence process very fair. 

6) Certain known defects in the title may be covered under the policy by specific underwriting assessment for an additional premium.

What precautions one has to take before buying such policies?

Like other insurance policies, it also has few disclaimers. It is to be remembered that only those losses and claims in the defect of the title are insured about which the insured was unaware on the date of the policy.

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HDFC Ergo launches Title Insurance – Should you opt?

Title insurance is something, which was much needed in the field of real estate. It would definitely bring comfort to the buyers as well as developers and lenders. It will provide customers with the peace of mind from title risks related to the land on which property rests.

It is must-have insurance for developers as it is an effective risk transfer mechanism keeping in mind the flaws in the tracking of title records.  If you are buying any property, you should ask for such title insurance which would help to reduce risk after you bought it.

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HDFC Ergo Title Insurance – Should you opt

Suresh KP


  1. i read this article and it is very well written and i think it will appear as an essay writing question in my NIACL Officer exam on march 2nd…thanks to the enlightment

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