Home warranty insurance
The level of cover provided by home A promise in a contract. For example, a promise by a manufacturer that goods will be repaired or replaced if they turn out to be faulty. insurance policies is set out in ministerial orders.
Home warranty insurance is only required if the An agreement that the law will enforce. price is more than $16 000. Accordingly, a large amount of In Victoria, a child or young person under 18. See also infant. work does not carry home warranty insurance. Typically, the policies cover:
- defective building work (including breach of the implied warranties);
- non-completion of work;
- loss of deposit or progress payment;
- alternative accommodation; and
- breaches by the builder of the ACL&FTA.
Structural defects are normally covered for six years, non-structural claims must be made within two years.
In most cases, the insurance policy A document that sets out what a person wants to happen to their money and other property after they die. not assist owners and they will need to deal with the builder. Domestic building insurance is insurance of last resort. It can only be claimed if the builder has died, gone bankrupt, or disappears. If the builder does not satisfactorily address the owner’s concerns, it may mean lengthy and expensive legal proceedings against the builder. Home warranty insurance is presently underwritten by the Victorian Managed Insurance Authority (www.vmia.vic.gov.au).
Cover for completion The amount charged by a lawyer for legal work. Lawyers can only charge the amount agreed with the client in a costs agreement or the amount stated by a court in its rules. The party who loses a case usually has to pay all their own costs plus most of the costs reasonably incurred by the other side. See also indemnity costs. is capped at 20 per cent of the contract price. Also, legal costs and expenses are included in the policy limit. Therefore, cover could be eroded by legal costs.
A Under the Australian Consumer Law, a person who buys goods or services for less than $40 000 or for personal or home use. must make a claim within 180 days of the date when they first became aware, or might reasonably be expected to become aware, of the circumstance giving rise to a claim. If an insurer declines a claim, any The review of the decision of a lower court by a higher court. If an appeal is successful, the higher court can change the lower court’s decision. must be brought within 28 days at the Victorian Civil and Administrative A body set up to hear and decide disputes, usually with less formality and less strict rules of evidence than in a court proceeding. (VCAT).
An insurer must make a decision on a claim within 90 days, failing which the claim is Treated by the law as if something is the case, even if that is not the reality. For example, children may be deemed to have the same home as their parents, whether they actually live there or not. Or a person may be deemed to have given their consent to something if they hear about it and do not object. Compare rebuttable. to have been accepted by the insurer.
Section 54 of the Insurance Contracts A written law made by parliament. Also called an ‘Act of parliament’, ‘statute’ or legislation. 1984 (Cth) should assist consumers who notify defects outside of the policy period, provided that the defects were detected within the policy period (see Chapter 10.4: Insurance). It is important that you read the home warranty insurance policy carefully. Not all defects are covered. In all instances, your first contact should be the builder. You may need to negotiate with the builder to get them to return and repair defects.
For policies issued after 1 July 2015, important changes have been introduced. The policy limit is now $300 000. The new policies pay claims if the builder has failed to comply with a final VCAT or An independent body that hears legal claims brought by parties and decides between them. Serious cases are heard by a judge and jury, or just a judge. Less-serious cases are heard by a magistrate. order. If you have an order, it is not necessary to wait for the builder to die, disappear, or become Being unable to pay your debts in full when they are due.. Any appeal periods must have expired.
Consumers can search the database to confirm that their builder is eligible for insurance (but only if the builder has agreed to be included in the search database). The status of policies issued after this date can be checked on VMIA’s website.
Owner–builders are not required to carry home warranty insurance unless they sell their home within six-and-a-half years of the date of the occupancy permit. At that time, they must apply for insurance and this requires an inspection report by a registered building inspector.
Consumers should insist that their builder is covered by contract works and public Legal responsibility, enforced by civil or criminal courts. insurance. This insurance normally covers damage to the works (e.g. by fire), liability to others such as neighbours arising during the work, and injury to others arising from the works. Consumers should check these policies to ensure they are named or included in the coverage provided by the policies.