– The NSW Government announce changes to the Home Warranty Insurance –
In November 2016 the Minister for Innovation and Better Regulation, Victor Dominello, announced ramifications to insurance under the Home Warranty Insurance or the Home Building Compensation Fund (HBCF).
Due to the current form being unsustainable, at a deficit value of more than $293 million, it was vital that the NSW government secured the growth of the warranty insurance scheme for the future. The boom of property development and construction work within NSW is reason in itself of the needed changes.
Even though the Government is still in the process of releasing full details on the revised reform, it was made clear that private insurance providers will be able to enter the market, as well as a renewal in 2017 of the risk based premium system.
Under the amended scheme, all residential construction work with a value of more than $20,000 and less than 3 storeys, will continue to require cover by insurance under the HBCF. Insurance is mandatory prior to commencement of work or invoicing, including deposits.
Other announced changes include:
- Broker commission may no longer be included in the premium.
- Insurers will be able to offer double product cover – $340,000 for non-completion and $340,000 for defects, as opposed to $340,000 in total.
- Additional funds will also be added by the Government to return the scheme to surplus.
Fire Safety Constructions supports a wider range of insurers entering the market and also a risk based premium system. As a company who has held continuous Home Warranty Insurance since 1999 and with our strong company financials this ensures owners have capable and secure contractors to choose from.