Private Home Warranty Insurance Provider Named
In November 2016 we announced that a private insurer was intending to enter the home warranty insurance market once the proposed changes to the home warranty insurance provisions of the Home Building Act were introduced around mid-2017.
The new home warranty insurer has launched its product under the banner ‘SecureBuild’ and Steve Griffin has been appointed Chief Executive Officer. Steve has over 20 years experience in administering home warranty insurance schemes and is the former commissioner of the Queensland Building & Construction Commission and the deputy commissioner of NSW Fair Trading.
SecureBuild claims that:
- their products will be simpler and easier for builders to obtain and provide to their home owner clients;
- eligibility will be simpler and easier than the current iCare requirements; and
- SecureBuild will put in place stringent requirements for defect prevention and payment of progress claims.
SecureBuild propose to appoint a building inspector for every project. The inspector will undertake inspections at each progress claim stage and require the builder to rectify any defects prior to payment.
The inspection regime has the purpose of identifying defects before they become a major concern and also prevents overpayment to builders. Lack of funds for completion of the building works where the builder has become insolvent has been a major factor in the cost overruns of the current insurance system.
The advantage of the private scheme for many builders will be the elimination of the need for personal bank guarantee securities or sureties for building work and the builder will not be required to provide quarterly financial audits or reviews. Premiums will also be discounted to reflect the builder’s good record.
SecureBuild intends to increase subcontractor accountability which they claim has been lacking under the existing insurance regime.
Overall it appears that the private scheme will have significant benefits for both owners and builders and for many builders it is eagerly awaited.
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