What do VMIA reforms mean to brokers

The Victorian Managed Insurance Authority (VMIA) has announced major reforms to the construction industry in a complete overhaul of the process through which Victorian builders and their brokers purchase Domestic Building Insurance (DBI) or warranty insurance.

Changes which come into effect from 1 July will see the once single-distributor monopoly replaced with a panel of six distributors chosen following an extensive tender process. Additionally, a BuildVic portal has also been launched by the VMIA, providing builders with direct access to upload information and manage and purchase DBI insurance themselves.

Essentially, the reforms will simplify and streamline the DBI process for builders; reducing red tape, reducing the paper trail and allowing builders to find all the information they need in one place. However, as a result, many brokers are now wondering what these changes will mean for them, and how it’ll affect their relationship with clients.

InsuranceHouse, has been selected as one of the distributors on the panel and we spoke to Bradley Day their National Construction manager for further clarification.

He says, “I have no doubt the panel will provide the industry with a higher level of service through access to the champions of the industry, who are true experts with specialist knowledge of the industry. I expect that these reforms will lead to better and clearer outcomes for all parties involved”.

How the change affects brokers

A broker’s ability to act on behalf of their builder clients won’t change, rather, the existing arrangement that sees brokers obtain insurance through QBE will end on 30 June. Builders will still have the option to go through their existing brokers to purchase and manage DBI – the significant change will be the number of distributors builders and brokers can choose to use.

For brokers who weren’t selected as part of the six on the distributor panel, they should work closely with clients to help them choose a new distributor to purchase and manage DBI. Nomination of a new provider should occur with a 30-day period of the new reforms being introduced.

For brokers that are one of the six chosen distributors, existing clients will be automatically assigned to them as the new chosen member of the panel.

It’s important to note any existing DBI certificates issued before the 30 June cut-off date will remain valid until the specified date on the certificate. The reforms only affect new DBI certificates after this date.

The benefits

The reforms mark a new era for DBI insurance. It will allow for quick easy access to DBI certificates and related documents; delivering a modern, flexible and efficient DBI service model for Victoria – regardless of whether builders choose to purchase and manage DBI insurance themselves, or access it through their broker.

The new approach, combined with clearer information, will ultimately help to reduce DBI premiums, and offer increased choice to the industry.

Overall, Day believes that this is a positive step forward for the construction industry in terms of insurance. He says, “While some brokers might feel apprehensive about the reforms, they should rest assured knowing the six chosen distributors went through a rigorous tender process. Personally, we very much looking forward to this new age of DBI insurance. At the end at the end of the day, it’s about working together to make sure builders have more time to build, and spend less time worrying about warranty insurance”.

VMIA’s new DBI Distributor panel consists of the following suppliers:

 

DBI Distributor Contact number Email
Arthur J Gallagher & Co (AUS) Limited 1300 300 115 builderswarranty@ajg.com.au
Bovill Risk & Insurance Consultants Pty Ltd 1800 077 933 DBI@bric.com.au
CCM Insurance Group Pty Ltd 03 9853 4688 dbi@ccminsurance.com.au
HIA Insurance Services Pty Ltd 1800 633 467 au.hiais@aon.com
Insurance House Pty Ltd 1300 305 834 Builders@IHGroup.com.au
MBA Insurance Services Pty Ltd 1800 150 888 dbi@mbais.com.au

 

As of 1 July 2017, this panel of DBI Distributors will provide access to VMIA DBI insurance via the BuildVic portal.

You will still be able to manage DBI on behalf of your existing clients, as previously advised. Your clients however need to nominate a DBI Distributor to gain access to the BuildVic portal. This is done by completing the attached nomination form which can also be download from the DBI website or completed and submitted online. You can work with your client to support them in choosing a DBI Distributor.

Following selection of a DBI Distributor, if authorised to do so by your client, you may access their BuildVic account, issue DBI certificates and also deal with the DBI Distributor directly on their behalf.

If you would like further information or to learn more about the changes, please contact a member of the DBI Distributor panel or visit www.dbi.vmia.vic.gov.au