NSW nails down home warranty insurance
NSW has added a fourth trigger to strengthen home warranty insurance as the product faces increased scrutiny from a disgruntled public.
Following reforms passed by the NSW Government on May 13, Fair Trading Minister Virginia Judge has announced new rules allowing claims to proceed if a builder’s licence is suspended for non-compliance with the orders of building tribunals or courts.
Previously consumers could only access the cover if a builder died, disappeared or was insolvent. Strict criteria led to the rejection of 45% of all claims in the year to June 30 last year, against just 2% across all other classes of insurance.
“The commencement of this new trigger for lodging claims is the most substantial reform to home warranty insurance since its introduction in 1997,” Ms Judge said.
But Builders Collective of Australia President Phil Dwyer told insuranceNEWS.com.au the development is likely to make little difference because builders’ rights to appeal the suspension could impose lengthy delays.
Earlier this month Federal Consumer Affairs Minister Chris Bowen called for another review into home warranty insurance citing “consumer frustration” and policy “underperformance”.
A spokesman for major NSW home warranty insurer Vero says the insurer welcomes the amended legislation claiming it will improve the scheme for the benefit of consumers.
“Vero continues to support the NSW Government’s work in ensuring sustainable consumer protection is provided by the NSW home warranty insurance scheme.”
Following reforms passed by the NSW Government on May 13, Fair Trading Minister Virginia Judge has announced new rules allowing claims to proceed if a builder’s licence is suspended for non-compliance with the orders of building tribunals or courts.
Previously consumers could only access the cover if a builder died, disappeared or was insolvent. Strict criteria led to the rejection of 45% of all claims in the year to June 30 last year, against just 2% across all other classes of insurance.
“The commencement of this new trigger for lodging claims is the most substantial reform to home warranty insurance since its introduction in 1997,” Ms Judge said.
But Builders Collective of Australia President Phil Dwyer told insuranceNEWS.com.au the development is likely to make little difference because builders’ rights to appeal the suspension could impose lengthy delays.
Earlier this month Federal Consumer Affairs Minister Chris Bowen called for another review into home warranty insurance citing “consumer frustration” and policy “underperformance”.
A spokesman for major NSW home warranty insurer Vero says the insurer welcomes the amended legislation claiming it will improve the scheme for the benefit of consumers.
“Vero continues to support the NSW Government’s work in ensuring sustainable consumer protection is provided by the NSW home warranty insurance scheme.”