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<h2>Property title insurance in the offing</h2> <p> Property transactions in India will soon have an insurance cover to fall back in case something goes wrong in the deal. The country&rsquo;s two large private sector insurers, ICICI Lombard General Insurance and Bajaj Allianz General, are planning to launch title insurance covers this year.<br /><br /> Title insurance is a cover that protects a potential owner of a property against loss from defects in title. The policy is a retrospective one, where the insured is protected against losses arising from the events that occurred prior to the date of issuing the policy. Globally, the policy is bought by investors, occupiers and financiers.<br /><br /> At present, none of the property transactions, be it large acquisitions or a simple sale of a land or a flat, is covered through an insurance policy by an Indian insurer.<br /><br /> The reason is that Indian insurance companies do not have the underwriting expertise to offer title insurance products. Indian insurers require reinsurance support to be able to offer the product.<br /><br /> Both Bajaj Allianz and ICICI Lombard are in talks with First American Title Insurance Company (FATIC), which will be offering reinsurance support for Indian insurers to offer the product.<br /><br /> FATIC is the largest title insurer globally, with a revenue of .4 billion in 2006.<br /><br /> Says Swaraj Krishnan, CEO, Bajaj Allianz General Insurance, &ldquo;We have had a preliminary discussion with First American Title Insurance. We have asked them to give us the product details. We will be doing a market study, verifying the titles and will file the product with the regulator in the coming months.&rdquo;<br /><br /> The value of the title insurance cover will be equal to the price of land that has to be acquired. The premium rates will be a function of the value of property, the nature of transaction, which means the size of the purchase, the past history of the real estate property, costs relating to title search and the legalities involved in the title search.<br /><br /> Howden Insurance Brokers is also in talks with real estate developers, financial institutions, law firms, insurance companies and reinsurers to culminate into the next few insurance policies being sold.<br /><br /> Says Anoop Mathur, vice-president of Howden Insurance Brokers, &ldquo;The value at risk has grown proportionally as the land cost has increased for the real estate developers. Title insurance makes a project bankable and saleable to customers.&rdquo;<br /><br /> According to Akshaya Kumar, chairman, Park Lane Property Advisors, consultants during due diligence discover 20-30 per cent cases have title defects in them.<br /><br /> Property consultants believe that the availability of title insurance products will boost private equity investment in Indian real estate since most of the institutions are very particular about clear titles. <p style="margin-bottom: 0; margin-top:5pt"> <font face="Arial" style="font-size: 10pt">Article Source: <a href="http://www.ArticlesMaker.com">ArticlesMaker.com</a></font></p> <h3>About the Author</h3> John Parker, the author of many articles regarding India Real Estate and <a href="http://www.indiarealestateblog.com" target="_blank">Commercial Property in India</a>, is a Realestate advisor and giving assistance to the people for <a>indiarealestate </a> and providing information on Real Estate Market in India.

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