Real estate may be a money-spinner for investors. But insurance companies do not think so.

When the State Revenue Department recently offered a lucrative business proportion to insurance companies to give insurance cover - Title Insurance - to properties, there was hardly any takers for it.

In fact, even four months after the announcement to introduce the innovative Title Insurance scheme, the department has been able to convince only four firms - United India Insurance, First India, National Housing Bank, ICICI, Lombard - to participate in it, official sources in the department told Deccan Herald.

The State government has proposed to introduce Title Insurance scheme, which is dubbed as first of its kind in the country, to not only provide additional guarantee to property buyers but streamline the real estate business which is in disarray.

The government has also offered 0.5 per cent concession in the stamp duty for registration of properties that are backed by Title Insurance.

The company, under the scheme, would make good the loss, if any, caused by any defect in the title to the owner and also pay the legal charges to fight the case. This is expected to reduce the risk of fraud on gullible people by land mafia. For this, officials said, insurance companies need to work out an insurance package with details like premium amount for different size of properties and others.

Official sources said, altogether nine companies had evinced interest initially. But most of them later backed out, apparently fearing the risk involved in it. “The widespread cases of fraud, encroachment and mushrooming of unauthorised layouts in Bangalore are reasons why Insurance companies fear about real estate,” explained an official.

Even if the companies take best of the legal advise on the authenticity of a title, there are great chances of deception and fraud. For there is no proper maintenance of records related to properties by the Government, officials pointed out.

Inspector General of Registration and Commissioner of Stamps H Shashidhar is, however, optimistic about it. “There will be some initial hitch with such schemes. When one or two companies start it, all others will follow suit,” he added.

He further said that four companies will shortly submit their packages under the scheme. A working group will be set up to evaluate the packages and finalise the scheme.