Do not treat the phrase title insured as proof that your particular loss is covered. Section 16 requires the promoter to obtain the insurances notified by the appropriate Government, including the stated title and construction categories. You need the applicable notification and the actual policy, schedule and endorsements to establish what insurance exists and how a claim can be made.
Does RERA automatically insure every project?
No. The wording is tied to insurance as notified by the appropriate Government. The Act's reference to title insurance should not be presented as proof that every project in every State has an operative policy covering every title dispute.
Ask the promoter to identify the applicable notification, insurer, policy number, insured property and policy period. Verify that the document concerns your project and the relevant risk. A general corporate insurance certificate may not insure the title to the land on which your building stands.
Which policy documents should I request?
Obtain the policy schedule, full wording, endorsements, premium-payment evidence and claims procedure. Ask who is insured or entitled to the benefit and whether the relevant allottee or association is identified in the manner required by the policy and law.
Read exclusions, limits, deductibles and notice conditions. A policy's headline value does not tell you what is payable for your loss. The insurer may require evidence of the title issue and compliance with claim conditions, so preserve the underlying notice or proceedings promptly.
Who pays the premium?
Section 16(2) makes the promoter liable to pay the premium and charges for the specified insurance and requires payment before transfer of the insurance to the association. A statement that buyers must arrange everything themselves should be checked against the applicable statutory duty and agreement.
If a separate charge appears in your cost sheet, obtain its basis and the policy it supposedly funds. Do not assume every insurance-related charge is valid or invalid without examining the documents. The relevant question is who bears the statutory obligation and what was actually contracted and paid.
When does the benefit transfer?
Section 16(3) says the specified insurance stands transferred for the benefit of the allottee or association, as applicable, when the promoter enters the agreement for sale with the allottee. Subsection 4 requires the insurance documents to be handed to the association on its formation.
That statutory language is important, but the practical claim still needs the policy record. Ask the insurer or authorised channel to confirm the relevant coverage and beneficiary position. Do not accept a promoter's oral assurance as a substitute for the documents needed to notify a claim.
Does insurance replace the promoter's title responsibility?
Do not assume it does. Section 18(2) separately addresses compensation for loss caused by defective title. An insurance claim and a claim against the promoter can raise different conditions, forums and amounts.
Disclose other claims and payments so that the adviser can assess overlap and avoid duplicate recovery. Do not sign a full release of the promoter simply to obtain a policy copy or claim form without understanding its effect.
What should the association do now?
Create an insurance register containing the policy, endorsements, premium proof, contact details and notification deadlines. Identify who will preserve the title records and communicate with the insurer. If the policy is missing, send a precise written request referring to the applicable duty and project.
When a title notice arrives, obtain legal advice on both the underlying title issue and the insurance notification. A debate about whether the promoter complied with section 16 should not cause the association to miss a live policy condition. The useful first step is documentary verification, not reliance on the word insured in a sales email.
This article is for general informational purposes only and does not constitute legal advice. Consult a qualified advocate for advice on your specific situation.