The NSW Government has announced an overhaul of the HBCF to enable private insurers to enter the market and improve protections for consumers against incomplete and defective work. Further information on HBCF reforms can also be found on our newsfeed.
Home warranty insurance needs to be provided by:
Home Warranty Insurance is required to be obtained where the contract price is over $20,000 or, if the contract price is not known, the reasonable market cost of the labour and materials involved is over $20,000.
Where the contract price or the reasonable market cost of the labour and materials involved does not exceed the above threshold, there is no legal requirement for home warranty insurance to be obtained.
Contractors who carry out residential building work must still hold an appropriate licence with Fair Trading where the labour and materials involved are valued at over $1,000.
Persons who contract and/or carry out specialist work (i.e. electrical wiring, plumbing, gas-fitting, air-conditioning and refrigeration) require a licence regardless of the value of the work.
Home warranty insurance provides a set period of cover for loss caused by defective or incomplete work in the event of the death, disappearance or insolvency of the contractor.
Policies issued from 19 May 2009 also enable home owners to make a claim where the licence of the builder or tradesperson responsible for the work is suspended or cancelled for failing to comply with a money (compensation) order made by the Consumer, Trader and Tenancy Tribunal or a Court.
Cover for loss arising from defective work is provided for a period of:
An additional 6 months cover applies in cases where the loss becomes apparent in the final 6 months of the period of insurance. The 6-month period starts from the date of the loss becoming apparent. Cover is also provided for loss arising from non-completion of work for a period of 12 months after the failure to commence, or cessation of, the work.
CRM Brokers has been arranging home warranty insurance since 1997 for builders, trade contractors and owner-builders. During that time our role has adapted to the various changes in arrangements and reforms, including the most recent change, by which HBCF will have a fixed panel of new Broker Distributors. One thing that will remain the same is the high level of service and commitment to our clients’ Home Warranty needs.
In that regard and going forward, we will on behalf of our clients:
By providing these services, We declare that