Home warranty insurance

What is home warranty insurance?

Warranty insures the owner (either the original owner or subsequent owners) against:

• Non completion of the building contract due to death, disappearance or insolvency of the builder; and
• Failure of the builder to correct faults, which are deemed by law to be the builder's responsibility, for a nominated warranty period. These contingencies are poor workmanship, faulty design, and inadequate or unsuitable materials and is only triggered by the death, disappearance or insolvency of the builder.

Legislation

The various wordings for statutory cover are based on legislation in force in each jurisdiction, namely:

Northern Territory Government will be introducing legislation which is designed to introduce a private warranty scheme in that region. This is expected to commence in late 2006 or early 2007.

Statutory warranties

In essence, the statutory warranties require the builder to do the work.

• In accordance with the plans and specifications in the contract
• In a proper manner
• Using good and suitable materials
• Using new materials unless otherwise stated
• In accordance with laws
• Within the time specified in the contract
• So as to be fit to be occupied when completed; and
• So as to live up to any result agreed it must achieve.

Specific home warranty insurance covers

• Licensed builders and contractors
• New builders (Just starting out as a new builder)

For more information about this policy contact HIA Insurance Services.

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