Are you buying a new house or apartment?

The Home Warranty Insurance Scheme exists to protect purchasers (including subsequent purchasers) from incomplete or substandard building work, whether structural or non structural.

Some key items to be aware of with this scheme are:

Certificate of Insurance

A builder, developer or tradesperson must supply a Certificate of Insurance from an approved insurer. If you are an owner/builder and work was done within the previous 6 years, a Certificate of

Insurance is also required . However, the Certificate of Insurance is only required when the Contract price is $20,000.00 or if the labour and materials supplied is over the value of $20,000.00 (previously $12,000.00).

Policies before 1 July 2002

For policies issued before 1 July 2002 cover is provided for 7 years from the date of completion of the work or the end of the contract for the work, whichever is the later for loss arising from defective work.

Policies after 1 July 2002

In October 2011 the NSW Government passed a series of amendments to the scheme for policies issued after 1 July 2002. Previously the insurance cover for structural and non structural

defects was 7 years. Changes to this scheme now reduce the period for claims to 6 years for structural defects and only 2 years for non structural defects. The new statutory warranty periods came into effect on 1st February 2012.

Notifying Insurers

The October 2011 amendments also include a requirement to notify the insurer in writing for policies created after 30 June 2002 (even if you have verbally notified your insurer about making a claim). You will be allowed 6 months from 25th October 2011 to notify your insurer in writing.

There is a mechanism allowing a delayed claim may be made if you are able to demonstrate that you pursued the negligent party to rectify the problem and notified your insurer during the insurance period.

If your policy was issued before 1st July 2010 all claims must be lodged within 10 years of the work being completed.

If you're not sure were you stand in relation to an insurance issue, please do not hesitate to contact us at MBBF.