The Victorian Government has defended the builders’ warranty insurance (BWI) scheme following media claims that it is a “multi-million dollar rip-off”.

The Age newspaper said last week that thousand of people were being “forced to pay premiums – and barely getting anything in return”.

However, figures quoted in its article represented only 12 months to May 30 of the Victorian Managed Insurance Authority’s contributions to the scheme.

QBE is currently the State Government’s authorised insurer for the scheme, while Calliden is the only other player to remain in the market after Vero withdrew last year.

However, Finance Minister Robert Clark says some of the interpretations made in the mainstream media aren’t accurate.

“I am not a great fan of the current system, but the figures released are only based on the first 12 months of the Government’s involvement in the scheme,” he told ABC Radio interviewer Jon Faine.

Mr Clark reiterated his previous comments to insuranceNEWS.com.au that the costs and benefits “cannot be validly be judged simply by comparing current premiums with payouts, because many lines of insurance have long tails”.

He says the government is currently investigating options for improving the system, including the use of mediation early on in the building process to address any builder-consumer related concerns before it gets to the claim process.