New Delhi: When buying a home, most people focus on price, location, and loan eligibility. But one important protection that often goes unnoticed is mandatory insurance under the Real Estate (Regulation and Development) Act (RERA). This insurance is meant to protect homebuyers from future risks related to property ownership and construction quality.
Under Section 16 of the RERA Act, builders are required to obtain insurance for the land title and the construction of the real-estate project. The developer must pay the insurance premium and transfer the insurance benefits to the buyer or the apartment owners’ association once the project is handed over.
This insurance becomes especially important if problems arise after possession — such as structural defects, construction damage, or legal disputes over property ownership. In such cases, the insurance coverage can help cover repair costs or financial losses.
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If a builder fails to obtain or transfer this insurance, the risk shifts to homeowners. In recent cases handled by state RERA authorities, builders were directed to bear repair expenses themselves when mandatory insurance was missing, highlighting the importance of verifying insurance documents before taking possession of a property.
The broader goal of RERA is to bring transparency, accountability, and protection for homebuyers in the real-estate sector, which historically faced issues such as unclear property titles, project delays, and construction defects.
What buyers should check
Before accepting possession of a property, homebuyers should:
Confirm the project is RERA-registered
Ask for insurance documents related to title and construction
Verify handover paperwork and builder compliance
These checks can help prevent financial and legal problems later.
In simple terms:
Mandatory RERA insurance acts like a safety net for homebuyers, ensuring that if something goes wrong with the property after possession, there is financial protection in place.
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