Home warranty up as insurers face client anger
Home warranty insurers have angered clients by charging up to 45% more for premiums and imposing higher security demands on builders.
Mid-sized Victorian building firm Glenvill has drafted an open letter to Victorian Government ministers after its insurer recently demanded greater security from the business, which has a $60 million turnover.
“Our insurer advised us a couple of weeks ago that our (home warranty) premiums would increase approximately 45% per policy,” Development Manager Stephen Bloch said in the letter. “Our insurer has demanded that insurance cover will be dependent on our MD cross-guaranteeing virtually every asset he and his family own.
“The two largest insurance brokers in Melbourne have advised us that insurers are increasingly concerned about economic viability in the current recession and are demanding significantly more security and balance sheet liquidity as a pre-condition of insurance.”
Home warranty insurance is compulsory on residential building works in most states and provides cover to consumers in the event the builder dies, disappears or becomes insolvent.
Builders Collective of Australia President Phil Dwyer told insuranceNEWS.com.au Glenvill is just one of many builders facing significant hikes in home warranty premium rates, with many others facing double-digit increases.
The cost of the insurance premium is passed on to consumers.
But Vero spokesman Sue Repanellis says the insurer has applied increases of only around 8-10% “in line with all commercial policies”.
Mid-sized Victorian building firm Glenvill has drafted an open letter to Victorian Government ministers after its insurer recently demanded greater security from the business, which has a $60 million turnover.
“Our insurer advised us a couple of weeks ago that our (home warranty) premiums would increase approximately 45% per policy,” Development Manager Stephen Bloch said in the letter. “Our insurer has demanded that insurance cover will be dependent on our MD cross-guaranteeing virtually every asset he and his family own.
“The two largest insurance brokers in Melbourne have advised us that insurers are increasingly concerned about economic viability in the current recession and are demanding significantly more security and balance sheet liquidity as a pre-condition of insurance.”
Home warranty insurance is compulsory on residential building works in most states and provides cover to consumers in the event the builder dies, disappears or becomes insolvent.
Builders Collective of Australia President Phil Dwyer told insuranceNEWS.com.au Glenvill is just one of many builders facing significant hikes in home warranty premium rates, with many others facing double-digit increases.
The cost of the insurance premium is passed on to consumers.
But Vero spokesman Sue Repanellis says the insurer has applied increases of only around 8-10% “in line with all commercial policies”.