New Zealand house builders have cast doubt on a Government proposal to make them take out builders’ warranty insurance.

Leaks and rot in new buildings have become a big issue in NZ in the past few years, with local authorities facing up to $500 million in liability actions for approving dodgy work.

Building and Construction Minister Clayton Cosgrove told Wellington’s Dominion Post newspaper he “intuitively likes” the idea of making builders take out insurance.

But NZ Master Builders Federation CEO Pieter Burghout says Australian schemes – in which the insurance claim is initiated only after all other means of resolving the issue fail – are disappointing and time-consuming for consumers.

Australian insurance companies won’t introduce a less complex scheme, he told the newspaper. “If Australia can’t do it, I would be surprised if we could.”

Insurance Council of New Zealand CEO Chris Ryan says a builders’ insurance scheme hasn’t been put formally to insurers.

“Its viability would depend very much on the terms and conditions, and what the Government has in mind. A compulsory scheme is interesting, but we need a lot more detail.”