The consequences of an insurer pullout from home warranty for high-rise buildings has become very clear, with the NSW and Victorian governments announcing plans to merge their troublesome home warranty insurance systems.  But Duncan West, CEO of Royal & SunAlliance’s general insurance division, says it’s not clear yet how the governments will proceed.

It is expected new regulations will address such issues as the scope of insurance cover, the period of cover for structural and non-structural works and adequate consumer protection.

Dexta MD Ashraf Kamha has declined to comment about the reasons for pulling his company out of the high-rise market, but confirmed that an announcement over new forms of cover will be made in the next few days.

Mr West said R&SA “broadly supports” the two governments’ attempts to find a solution.

HIH held 40% of this market segment, and its collapse created a massive hole. It’s understood low standards of workmanship on many high-rise developments have made warranty insurance unsustainable. The long-tail nature of the business hasn’t made things any easier.