The NSW Government is proposing changes to the NSW Home Building Compensation Fund (HBCF).
The reforms of the HBCF will enable private insurers to enter the market and improve protections for consumers against incomplete and defective work.
Minister for Innovation and Better Regulation Victor Dominello said that the current scheme has been in significant deficit for many years and is in need of reform.
“This insurance provides a safety net for homeowners in the event a builder cannot complete residential building work or fix defects, due to insolvency, death, disappearance or licence suspension,” he said.
“We are committed to enhancing consumer protection, improving home building standards and reducing the risk of insolvencies through private sector competition and innovation.”
The proposals include:
- phasing out of broker commissions
- allowing insurers to offer split cover for defects and non-completion, at $340,000 cover for each
introducing risk-based pricing.
Premium increases will take effect in early 2017 and the government will inject funds to return the scheme to surplus.
Further information can be found on the State Insurance Regulatory Authority (SIRA) website.
New legislation is expected in the first half of 2017.
NIBA is in discussions with the NSW Government and will be monitoring developments carefully. We will provide members with further information about these changes as they come to hand.