The Victorian Government is to take over builders’ warranty insurance (BWI), setting up a fund under a single body to oversee builder registration, disputes and claims.

QBE is the last remaining insurer in the Victorian BWI market, with the Victorian Managed Insurance Authority underwriting its cover.

From July next year the Domestic Building Consumer Protection Fund will provide cover under industry regulator the Victorian Building Authority (VBA).

A government spokesman told insuranceNEWS.com.au details are being finalised and the VBA may subcontract some of the work, such as claims-handling, to the insurance industry.

QBE says it is too early to comment.

Finance Minister Robert Clark says the fund will give consumers greater protection and builders will get an integrated process for registration and coverage “without their livelihood being dependent on separately satisfying a regulator and an insurance company”.

Builders Collective President Phil Dwyer told insuranceNEWS.com.au the new fund is “near enough to a first-resort scheme” and will provide a better deal to builders and consumers. 

He says builders will be able to obtain cover and there will be a dispute scheme both they and consumers can access.

Consumer Action CEO Gerard Brody says consumers will get more protection. They will be able to claim if their builder is deregistered or has their registration suspended, or if the builder dies, disappears or is insolvent.

Calliden stopped writing Victorian BWI at the end of last year, saying the market was unsustainable.

Victoria’s Essential Services Commission will monitor the performance of domestic building insurance during the transition to the protection fund.