Building your dream home is an exciting journey, but it can quickly turn into a nightmare if your builder becomes insolvent, disappears, or walks away as he fails to complete the work. In such unfortunate circumstances, home warranty insurance acts as a safety net, ensuring homeowners are not stranded financially.
What Is Home Warranty Insurance?
Home warranty insurance, also known as builders’ warranty insurance or home indemnity insurance, is a mandatory policy in Australia for residential construction projects exceeding a specified value. The policy is typically taken out by the builder and provides coverage if the builder cannot fulfill their obligations due to insolvency, death, disappearance, or license suspension.
How Home Warranty Insurance Protects Homeowners
1. Completion of Unfinished Work
If a builder abandons a project, home warranty insurance can cover the costs of hiring another licensed builder to complete the construction. For instance, in New South Wales, the policy covers up to 20% of the contract price for non-completion claims, provided the claim is made within 12 months of the work stopping.
2. Rectification of Defective Work
Should the builder’s work be substandard or defective, the insurance can fund repairs.
3. Protection Against Builder’s Insolvency
In the unfortunate event that a builder becomes insolvent, the insurance ensures homeowners are not left to bear the financial burden of completing or rectifying the work. This protection is crucial, as seen in cases where builders have entered liquidation, leaving multiple projects incomplete.
Understanding the State-by-State Coverage
New South Wales (NSW): Home building compensation cover is required for projects over $20,000. It covers non-completion, defective work, and major defects, with claims for non-completion that need to be made within 12 months.
Victoria: Domestic building insurance is mandatory for works over $16,000. It covers structural defects for up to six years and non-structural defects for two years, with incomplete works capped at 20% of the contract price.
Queensland: Home warranty insurance is compulsory for residential construction work valued over $3,300. It covers non-completion, defective work, and damages due to fire, storm, vandalism, or theft, up to a maximum of $200,000.
Western Australia: Home indemnity insurance is required for projects over $20,000. It covers non-completion and defective work, with specific claim limits and timeframes.
How Dwelcom’s Home Warranty Specialists Can Help
At Dwelcom, we understand how tricky the home warranty claims process can be when your previous builder walks away, leaving you with incomplete or defective work. So, we provide homeowners with honest and expert assistance throughout the process and help them navigate the complexities of warranty insurance claim management with confidence and ease. Our insurance builders will also take care of the incomplete and defective work and make your home ready for you to dwell in.
Wrapping Up
Home warranty insurance is a crucial safeguard for homeowners, providing financial protection and peace of mind in the event of builder insolvency or abandonment. Homeowners can navigate such challenges more effectively by understanding the coverage specifics and adhering to necessary procedures.
Do you want to ensure a hassle-free experience while navigating all aspects of home warranty claims management? Connect with the Dwelcom team today and let our home warranty claim management specialists guide you from claim initiation to resolution. Connect with our team for honest guidance!