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Vero defends home warranty insurance

Vero has defended the quality of last-resort home warranty insurance as a Senate inquiry into the product continues.

The insurer is the home warranty insurer for failed building firm Beechwood Homes, which entered administration last month.

Last week Vero said it has already paid and installed appliances for “a number” of nearly completed homes and the owners have taken possession of the properties.

Though home warranty cover has been condemned as “junk insurance” by consumers and builder advocates, Vero claims there are many misconceptions about the product.

It says the actual claims-to-premium ratio is from 60% to 85%, and the policy is priced competitively against the state-run Queensland scheme.

A Sydney Morning Herald report earlier this month claimed home warranty insurers had paid only 7% of their premium revenue in claims since 2002. Of $225 million collected, only $16 million was paid in claims.