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| New Home Warranty Building Insurance Reforms |
| In the fallout of the HIH collapse and events surrounding 11 September 2001, we are increasingly aware of spiralling insurance costs. To address these problems the State Government has introduced a number of reforms to the Home Building Act 1989 (NSW). |
The Reforms include:
- homeowner claims will be limited to "last resort" claims where the builder is insolvent, has disappeared or died. Otherwise the homeowner will have to resort to Court or Tribunal action against the builder;
- the period of cover will be reduced from 7 years to 2 years for non-structural defects;
- the period of cover will be reduced from 7 years to 6 years for structural defects.
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| The reforms which commenced on 1 July, 2002 clearly favour builders and their insurers. Only time will tell whether the reforms stabilise escalating insurance costs. |
Despite the reforms, the obligation for builders to carry out their work in a proper and timely fashion remains. |
