With the Real Estate (Regulation and Development) Act, 2016 (RERA) fastening liability for any structural damage to buildings on to real estate developers, reinsurers such as General Insurance Corporation of India (GIC Re), along with other industry players, are seeking to develop a product to cover this risk.
The Act, which aims at protecting the rights and interests of consumers and promoting uniformity and standardisation of business practices and transactions in the real estate sector, has opened up a new line of business for direct (general) insurers and indirect (reinsurance) insurers, say industry experts.
According to RERA, any structural defect or defects in workmanship, quality or provision of services, or any other obligations of the promoter (real estate developer) as per the agreement for sale, is brought to the notice of the promoter within a period of five years by the allottee (buyer) from the date of handing over possession, and it is the duty of the promoter to rectify the defect without further charges within a period of 30 days.
