Building Commissioner Peter Gow today announced a pricing reform to Western Australia’s home indemnity insurance (HII) scheme.
Large volume and multi-unit project builders will have to pay a premium increase as of Monday 2 October 2017.
The increase is required to ensure the HII scheme is sustainable and to prevent WA taxpayers from footing the bill for recent builder failures.
Small to medium volume builders will be exempt from this round of premium increases, unless they are involved in multi-unit projects. This will help address an inequity that has existed in the pricing of HII in WA for some years.
Many small to medium volume builders have been forced to pay almost $5,000 more than large volume builders for a HII certificate for a home worth $300,000 to $350,000.
The amount of the premium paid, and any increase, will vary among individual builders and will depend on the assessed degree of risk and/or exposure they represent to the State.
Builders must obtain HII for residential building work worth over $20,000 in WA.
HII protects owners against financial loss if a builder cannot complete the work or meet a valid claim for faulty or unsatisfactory building work due to death, disappearance or insolvency.
“Home indemnity insurance provides crucial protection for Western Australians building or buying a new home from unforeseen financial losses,” Mr Gow said.
“The scheme promotes consumer confidence in the home building industry.
“These changes better align risks and premiums, while supporting fair and reasonable premiums across the industry.”
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