HomeBuilder and Building Bonus Stimulus - Home Indemnity Insurance considerations
July 05, 2020
Home Indemnity Insurance (“HII”) is a statutory requirement under the Home Building Contracts Act 1991 (“HBCA”).
The HBCA requires registered builders carrying out residential building work in excess of $20,000 that requires a building permit, to provide the owner with a policy of HII prior to taking a deposit from the owner or prior to commencing the work.
Insurers providing HII consider the product to be a “financial risk” product as, in the main, cover is being provided against the insolvency of the builder. As a consequence, insurers seek to assess the financial strength of the builder to determine the terms of eligibility for HII. The terms of eligibility encompass an “Annual Turnover Limit” that places a cap on the value of works that can be insured in a 12 month period.
With the stimulus being offered by both State and Federal government, members are advising that they are receiving a high volume of enquiries. It is important that members are aware of the terms and conditions of their HII eligibility to ensure that their facility will accommodate any contracts being entered in to. If changes to facility limits are required, members are encouraged to contact their broker to ensure that the appropriate limits are in place prior to entering into any contractual arrangements.
HIA Insurance Services (HIAIS) is the largest and most experienced broker of HII nationally and have been working closely with HIA and QBE to effectively manage the unprecedented circumstances facing our industry. HIAIS can be contacted on 08 9340 0700 with any queries.