CGU will be selling home warranty insurance in NSW and Victoria from the end of next month, says IAG Deputy CEO Ian Brown.

The new home warranty insurance product has largely been made possible by reforms by the two states’ governments “which aim to create an efficient, effective and sustainable regulatory environment”. IAG’s entry will certainly ease some of the pressure the home warranty market has been under. Its new product will be distributed through brokers.

“The launch of CGU home warranty insurance… will give builders greater choice and increase availability and competition, helping reduce any delays for people wanting to build or renovate their home,” Mr Brown said.

Cover will be introduced in three stages:

• From May, distribution will initially be limited to brokers endorsed by the leading building industry associations;
• From June/July, distribution will be expanded to include a number of international, national and regional brokers, as well as selected cluster groups;
• Later in the year, CGU will “explore opportunities” to distribute home warranty insurance through a wider group of intermediaries.

Mr Brown says IAG will also look at entering the market in other states. “We encourage other state governments to consider similar home warranty insurance reforms to make it viable for us to enter the market in those states,” he said. “It’s in everyone’s interest to see harmonisation of state schemes in the long term.”