Building clients urged to check warranty insurance before paying up
- Home indemnity insurance is compulsory for home building work valued at $20,000 or more
- Confirm the builder has an HII policy for your project before paying deposits
- HII offers financial protection for incomplete or defective work in certain situations
WA’s building regulator is urging home building clients not pay deposits without seeing evidence that the builder has a home indemnity insurance (HII) policy in place for their project.
The advice from Building and Energy applies to residential building work valued over $20,000. Under the Home Building Contracts Act, builders must take out HII in the owner’s name and provide them with a copy of the policy before accepting payments or starting work.
“HII is an important safeguard for home owners because it protects against financial loss for incomplete, faulty or unsatisfactory work in the event that the builder dies, disappears or becomes insolvent,” Building and Energy Executive Director Saj Abdoolakhan said.
“In most cases, the insurance policy must cover the building work during construction and for six years after practical completion.
“While most industry members are doing the right thing, we have become aware of some cases where the builder may have accepted money for home building projects that are not covered by HII.
“We are monitoring this closely and I also urge consumers to do their due diligence before paying a deposit.”
Consumers can source HII information from their builder or QBE, which is the main HII provider in WA, via email@example.com or 1300 790 723. QBE has a Builders Warranty Insurance Certificate Register, which can confirm that the HII certificate provided by the builder was issued by QBE and that the details match.
A fact sheet on HII is available at the Building and Energy website.
Preparation of plans agreements (PPAs) – which involve a builder’s initial site assessments and planning before a contract is signed – are not covered by the Home Building Contracts Act or HII. PPA-related costs are often not refundable if a building contract does not progress.
Media contact: Sarah Roberts – 0466 409 828 – BEmedia@dmirs.wa.gov.au
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