Update to Domestic Building Warranty Insurance in Victoria
The proposed reforms to the domestic building industry (discussed in the CommBarNews of 28 May 2014) have been put on hold by the change of government in Victoria. Despite this, VMIA has taken the pro-active step of improving the services it offers to consumers.
The Victorian Managed Insurance Authority (VMIA) and QBE (as VMIA’s agent) have made changes to its domestic building warranty insurance product. These initiatives are for the benefit of consumers and to improve problems which occur in the domestic building industry and often find their way to VCAT. They will apply to policies issued from 1 July 2015. The initiatives are:
- An online search function to allow consumers and others to check if a builder is eligible for insurance. It is hoped that this will limit the instances of consumers signing contracts with uninsured builders or contracting with an entity which is not the insured.
- An online search function to allow consumers and others to check if insurance has been issued for a particular property, and if so, whether any claims have been made. It is hoped that this will allow purchasers to make informed decisions about any property they intend to purchase, and will also provide another means for consumers who have entered into a building contract to find out if their builder has in fact obtained the required insurance.
- A fourth “trigger” under which indemnity will arise. For policies issued after 1 July 2015, a home owner may make a claim for the three original “triggers” as well as a new fourth one, as follows:
(1) the builder is dead,
(2) the builder has disappeared,
(3) the builder is insolvent, and
(4) a home owner now may also make a claim if they have a Tribunal or Court Order against a builder, the time for appeal has expired and the builder has not paid the judgement sum. “Tribunal or Court Order” is defined in the policy as
“Any order in favour of you, other than an interim order, made by the Tribunal or a court of competent jurisdiction following a hearing on the merits where the Tribunal or court has made a finding:
(1) that the builder or speculative builder is responsible for … loss or damage …[which is further defined]…;
(2) as to the amount of the loss or damage suffered by you as a result of the events mentioned in (1).”
The definition also excludes orders made as a consequence of a breach of terms of settlement.
This new cover will avoid the consumer having to incur costly enforcement proceedings (which are not covered under the policy) before they can make a claim.
Details of the changes may be found at http://www.dbi.vmia.vic.gov.au