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Home Warranty Changes

logo_newsMEDIA RELEASE 3 August 2015
Home Warranty Insurance changes
SPASA's preferred Insurance Broker, Nationwide Insurance Brokers has provided the below summary of changes relating to HOME WARRANTY INSURANCE.
 
As you may be aware the NSW Self Insurance Corporation trading as the Home Building Compensation Fund (HBCF) is making significant operational changes to IT systems and eligibility approval from 4 August 2015. From this date your insurance intermediary will be submitting your applications for HBCF cover directly to the HBCF’s IT system.

The Government has announced it will use the IT capability as an opportunity to change eligibility limits to the number and value of jobs under construction (Open Job Limits) rather than the moving annual limit system. Individual limits on the maximum contract value for the various types of projects will continue.

Please take the time to read this correspondence carefully and refer any queries to your intermediary, who have been briefed on the changes and are being trained in the new CIMS system.

The following will not change;

·         HBCF continues as the sole insurer in NSW as required by the Home Building Act 1989.

·         HBCF certificates will still be provided by your choice of insurance intermediary and HBCF is continuing to pay a commission for the work they do.

·         Intermediaries will continue to arrange for eligibility reviews to be completed as scheduled by HBCF.

·         Certificates of insurance are still required to be provided to your home owner clients before the building contract is enforced or deposits can be taken. Evidence of cover is reinforced by the HBCF website Certificate Register but this does not replace your obligations under theHome Building Act 1989 to provide a certificate to your clients.

·         The HBCF published service level standards will continue.

·         Builder premiums effective 1 July 2015 will apply until further notice.

The following changes will have an impact on your business;

·         You have been allocated a new eligibility limit setting out the maximum number and total value of jobs you can have under construction at any one time. Where you believe this new limit does not reflect or exceed your current eligibility limit controls please urgently take this up with your insurance intermediary. Every effort has been made to allow business to continue as normal. The new eligibility controls will apply to all residential builders operating in NSW who need HBCF certificates.

·         You will be required to send all applications for HBCF cover to your intermediary for processing. A new application form allows for data on the exact exposure to the insurer. IT systems have not previously captured information on exactly what work is being performed under the building contract.

·         An interactive electronic Project Application Form is being developed to capture only the fields that a specific project requires.

·         A Job Completion Notice will need to be sent to your intermediary so that your open job limit can be refreshed as each project reaches practical completion. There will not be any evidence required from you for completion, such as occupancy permits or sign off by the owner.  HBCF will accept the builder’s declaration that the job has reached a stage of practical completion. This will minimise the insurer’s impact on your operations and client relationships.

·         Once a policy is issued in CIMS, or a completion date is added, the home owner receives an email from CIMS confirming this action. The home owner is referred to the builder with any queries. Certificates of insurance are still to be provided by the builder. Advising the home owner of practical completion will assist with policy expiry dates in the event of any claims and provide a check against the builder prematurely claiming practical completion to refresh their eligibility limits.

Every effort has been made to ensure that your current approved level of activity can continue with a minimum of 20 percent increase in all limits and an indexing of completed job values. In some cases the limit has been increased to allow for accepted minimum activity for certain types of construction.

The following actions are now required;

·         Review the proposed open job limits you have been provided with for any immediate impact for accessing certificates of insurance.

·         Ensure that your insurance intermediary can continue to service your HBCF requirements, as some brokers will not be participating under the new IT system.

·         Review your client quotes in the pipeline and job completion times to ensure that application is made for increases in open job limits before any expansion in construction activity numbers occurs.

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Members that have queries regarding the changes should urgently contact your accredited NSW Home Warranty Insurance Intermediary or Nationwide Insurance Brokers for specialist advice. 

NATIONWIDE INSURANCE BROKERS PTY LTD

   Contact: Michael Carr | Phone: (02) 9634 0900 |  Fax: (02) 9634 0910

   Email: This email address is being protected from spambots. You need JavaScript enabled to view it.| Web: www.nationwideinsurancebrokers.com.au

   Office: Suite 11, 6-8 Old Castle Hill Rd, Castle Hill NSW 2154

For further information, please contact:
Spiros Dassakis - CEO
Swimming Pool and Spa Association of NSW & ACT (SPASA)
1/33 Daking Street, NORTH PARRAMATTA NSW 2151, 
PO Box 245 Northmead NSW 2152                           
Toll: 1800 802 482
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.