Requirements for Home Warranty Insurance
Coverage and Benefits of Home Warranty Insurance
Home Warranty Insurance is a mandatory insurance that covers homeowners against incomplete or defective residential construction work, where the builder is no longer able to meet their contractual obligations, because the builder has died, or became insolvent, or disappears, or its licence was suspended due to non-compliance with an NCAT or Court order to pay the homeowner.
This insurance typically covers incomplete work, major defects, and other defects. For incomplete works, the coverage lasts for 12 months from the date that the work stopped or failed to start. Major flaws are covered for completed work for 6 years after completion, and lesser defects are covered for 2 years after completion.
For homeowners, this insurance offers peace of mind that they will be covered against losses resulting from this catastrophe in the event that the builder is unable to fulfil its contractual duties due to death, insolvency, disappearance, etc. Having home warranty insurance shields builders from potential lawsuits and demonstrates their dedication to producing high-quality work, which may draw in more customers.
Claims and Disputes with Home Warranty Insurance
Making a claim under Home Warranty Insurance can be a complex process. It is essential to follow the correct procedure and review the insurance policy to ensure the claim is valid. Generally, the homeowner should file for a claim with the claims manager using the appropriate insurance claim form with attached supporting documents. Disputes can arise when the insurer disputes the claim, or the builder disputes the validity of the defect. Homeowners may also resolve disputes by engaging in alternative dispute resolution methods like mediation or arbitration.
The Importance of Home Warranty Insurance in NSW
Home Warranty Insurance is crucial for homeowners and builders in NSW to protect against financial loss and legal disputes in the event of defective workmanship or incomplete construction projects. As a construction lawyer with over a decade of experience, I highly recommend obtaining Home Warranty Insurance to safeguard against potential risks and liabilities.
Additionally, homeowners and builders need to make sure that their building contracts are just, open, and lawful. I counsel homeowners on the value of carefully reading and haggling over building contracts before signing them as a lawyer specialising in construction law. In order to make sure that their contracts adhere to statutory requirements and professional norms, builders should also seek legal counsel.
Download our Building Contract Assessment Checklist to assist you in reviewing your building contract. The checklist is a valuable tool for homeowners and builders to ensure that their building contracts are fair, transparent, and compliant with legal requirements.
