Some years after buying a flat, a Bengaluru owner received a legal notice from a person claiming a share in the land the building stood on, tracing a right back through an old family partition the seller had never disclosed. The owner had done the usual checks and bought in good faith, yet found himself defending a title he thought was settled, with the cost of the fight falling on him. A careful title search reduces the chance of this happening, but it cannot rule it out entirely, because some defects are hidden or arise from documents no search would reach. Title insurance exists for exactly this gap, the rare case where a title thought to be clean turns out not to be, and the loss lands on the current owner.

The short answer. Title insurance protects a property owner against financial loss if a defect in the title surfaces after purchase, such as a prior owner's claim, a flaw in the chain of ownership or a forged document in the past. Under Section 16 of the Real Estate Act, the developer of a registered project is required to obtain title insurance and transfer the policy to the owners' association on handover, and the insurance regulator has approved title products, including ones for retail buyers, though that retail market is still developing. It is a backstop to due diligence, not a substitute for the title opinion. The trade off is a premium against protection from a rare but potentially severe loss.

What is title insurance?

Title insurance is a policy that covers the financial loss an owner suffers if the title to their property turns out to be defective. Unlike most insurance, which protects against a future event such as a fire, title insurance protects against defects that already exist in the past of the property but have not yet come to light, a break in the chain of ownership, an undisclosed heir with a claim, a forged deed somewhere in the history, or an encumbrance that was never revealed. The insurance regulator introduced title insurance products to protect owners from exactly these title related losses, and a policy indemnifies the insured against the loss and often the legal costs of defending the title. The reason it is distinctive is that it addresses a risk due diligence can reduce but not eliminate, because however carefully a title is searched, some defects are simply not discoverable from the records. Title insurance is the financial cushion for that residual risk, turning a potential catastrophic loss into a claim on a policy.

What does it cover, and what does it not?

Title insurance covers loss arising from defects in the title, and it is important to see what that does and does not include. On the covered side sit the classic title problems, a prior owner or heir asserting a claim, a defect or forgery in the chain of ownership, an undisclosed lien or encumbrance, and the legal costs of defending against a challenge to the title, which some products cover specifically. What it does not cover is just as important. It is not insurance for the physical building, so it does not pay for fire, flood or structural damage, which is the province of property or home structure insurance. Nor is it loan protection insurance, which repays a home loan if the borrower dies or cannot pay. Title insurance sits in a different category from both, because it protects the ownership itself rather than the structure or the loan. For a buyer, the practical point is to know which risk each kind of cover addresses, and to recognise that a policy protecting your title is not the same as one protecting your house or your loan.

Does RERA require title insurance?

Yes, at the project level the Real Estate Act requires the developer to insure the title. Under Section 16 of the Act, the promoter of a registered project has to obtain insurance in respect of the title of the land and building, and is required to pay the premiums and transfer the benefit of that insurance to the association of allottees once it is formed. This means that for a flat in a RERA registered project, there should be a title insurance policy at the project level that the developer took out and that passes to the owners' association on handover. For a buyer this is worth knowing for two reasons. It is one more thing to ask about when buying in a registered project, whether the title insurance under Section 16 exists and will be transferred to the association, and it signals that the law already treats title risk as serious enough to require cover. The retail side, a policy an individual buyer takes on their own flat or a resale purchase, is a separate and still developing market, but the project level obligation under the Act is already part of the framework.

What does title insurance look like at a glance?

The table below sets out the key points about title insurance for a buyer.

Reading the table, title insurance occupies a specific and narrow role, covering the risk that ownership itself is challenged, which the other common insurances do not touch. The RERA obligation puts a project level policy into the framework already, while a retail policy is an option a cautious buyer can explore, particularly for a resale or independent purchase where no developer policy exists. What the table makes clear is that title insurance is neither a cure all nor a replacement for checking the title, but a defined cover for a defined risk.

Is title insurance a substitute for due diligence?

No, title insurance is a backstop for due diligence, not a replacement for it, and treating it as a shortcut would be a mistake. The primary protection against a title problem is still to investigate the title thoroughly before buying, through the chain of documents, the encumbrance certificate and an advocate's title opinion, because the cheapest title problem is the one you catch before you pay. Title insurance does not remove the need for any of this. What it does is cover the residual risk that survives a careful search, the hidden defect that no reasonable investigation would have found, which is precisely the kind of loss that is otherwise devastating because it was genuinely unforeseeable. So the right way to see it is as the last layer, sitting behind good due diligence rather than in front of it. A buyer who skips the title checks and relies on insurance has the order backwards, because insurance responds to a loss, while due diligence prevents one, and preventing a title dispute is always better than being compensated after living through it, however good the policy behind you might be.

How should a buyer approach title insurance?

Work through these steps as part of a purchase.

1. Do the title due diligence first, through the documents, the encumbrance certificate and a title opinion.
2. In a registered project, ask whether the Section 16 title insurance exists.
3. Confirm the developer intends to transfer that policy to the owners' association.
4. For a resale or independent purchase, explore whether a retail title policy is available.
5. Understand that title insurance covers title defects, not structure or loan risk.
6. Read what a policy covers and excludes before treating it as protection.
7. Treat insurance as a backstop behind due diligence, never as a replacement for it.

How does this fit the title opinion and other insurance?

Title insurance is the financial counterpart to the legal check you run on the title. The due diligence that reduces the risk is the work we describe in our guide to the legal scrutiny report and the title opinion, and understanding how title cover differs from other policies connects to our explainer on home insurance and home loan insurance. For a flat in a registered project such as Sattva Aaranya on Mysore Road, the developer's title insurance under the Act is one of the protections that should pass to the owners. The title opinion, the title insurance and the other property insurances each cover a different part of owning a home, and title insurance is the one that stands behind the ownership itself when a defect no search could catch comes to light.

Frequently asked questions

What does title insurance cover? It covers the financial loss an owner suffers if the title turns out to be defective, such as a prior owner or heir asserting a claim, a flaw or forgery in the chain of ownership, or an undisclosed encumbrance. It covers defects already in the property's past that have not yet come to light.

Is title insurance the same as home insurance? No. Home or property insurance covers physical damage to the building, such as fire or flood, and home loan insurance repays the loan in defined circumstances. Title insurance is different, because it protects the ownership itself against a defect in the title, not the structure or the loan. The three cover separate risks.

Does RERA require title insurance? Yes, at the project level. Under Section 16 of the Real Estate Act, the developer of a registered project must insure the title, pay the premiums, and transfer the benefit of that policy to the association of allottees on handover. For a flat in a registered project, ask whether it exists and will be transferred.

Do I still need to check the title if there is insurance? Yes. Title insurance is a backstop for the residual risk that survives a careful search, not a substitute for doing the search. You should still investigate the title through the documents, the encumbrance certificate and a title opinion, because preventing a title dispute is far better than being compensated after one.

Last updated 2026-08-31. PropNewz Team.