There were smiles all round last week when the Victorian and NSW governments launched the new builders’ warranty scheme. The new deal includes the scrapping of high-rise warranty in the hope of attracting more insurers into the market

Victorian Minister for Finance John Landers said the reforms will ensure substantial consumer protection for homebuyers, a healthy building industry and a viable market for insurers. 

Apart from bringing the scheme into line with other states, the new reforms will make sure that consumers only claim on their builders’ warranty as a last resort, such as if the builder dies, disappears or becomes insolvent. Other concessions include changes to the threshold for jobs requiring insurance. It has been raised from $5000 to $12,000.  And finally, home warranty insurance will cover structural defects for six years and non-structural work will be reduced from six years to two. 

Dexta MD Ashraf Kamha, whose company is one of the two major catalysts behind the changes, is delighted with the reforms. “They will ensure the long-term viability of the scheme,” he said, indicating that two other insurers are likely to soon enter the scheme.