QBE and Calliden will ensure the maintenance of the privatised builders’ warranty insurance scheme in WA.

The state’s Housing Minister, Bill Marmion, announced last week an “in-principle agreement to ensure coverage will continue to be available to new home buyers and renovators against the risk of a builder going under”.

QBE and Calliden will join the WA scheme to fill the void left by departing insurer Vero, which was the state’s major provider of builders’ warranty cover. Vero will stop providing cover on June 30.

The decision allows the WA Government to maintain the existing mandatory scheme following the departure of Vero, CGU and Lumley Insurance.

Mr Marmion says the Government will consider reforming the existing privatised system during the term of the three-year agreement.

“The Government has agreed to retain the current mandatory scheme for a fixed period of three years to allow reform options to be considered, and for the arrangement of an orderly transition to a new system, should it be required,” he said.

Builders’ warranty insurance covers homeowners from loss during the building process should their builder die, become insolvent or disappear during the six-year warranty period.

The departure of insurers from the market has led to “dramatic increases” in premiums, according to Builders Collective of Australia President Phil Dwyer.