The three remaining builders’ warranty insurers have signalled their intention to take on extra capacity after Lumley Insurance and CGU announced plans to depart the market.

NSW and Victorian government representatives last week met with major insurers to assess market capacity after the two insurers announced plans to stop writing the cover.

After January 1, just QBE Australia, Vero and Calliden will provide the cover, which is a compulsory product for builders of new homes in all states except Queensland and Tasmania.

Lumley and CGU had a significant presence in the market, together controlling about 25% of the home warranty insurance market in NSW alone.

A Vero spokesman told insuranceNEWS.com.au last week the company is prepared to take on new business provided builders meet the company’s eligibility criteria.

Vero’s outlook is key, because the insurer controls between 40-50% of the home warranty market in each state.

A Calliden spokesman has confirmed its commitment to the home warranty market and says there is no plan to head for the exit.

Broker HIA Insurance Services says discussions with QBE have “confirmed that they have the capacity and willingness to issue any policies that CGU Insurance might have offered”.

Perth-based EBM Insurance Brokers provides BuildCover-branded home warranty cover underwritten by the major insurers. MD Jeff Adams says he foresees no difficulty in sourcing alternatives to Lumley and CGU.

“I think it is all a bit of a beat-up,” he told insuranceNEWS.com.au.