Monthly Archives: September 2013

Last Resort Builders Warranty Fiasco continues

INSURANCE publishes the industry views on Governments and their lack of ability to listen to our industry and provide real consumer protection

Builder groups attack WA warranty reforms
30 September 2013

Proposed builders’ warranty insurance (BWI) reforms in WA will not solve market problems, according to trade groups.

The Builders Collective says the plan will increase the cost of cover, while Master Builders WA has questioned claims the plan will attract more insurers to the market.

The state’s only remaining BWI insurers, QBE and Calliden, are considering an Economic Regulation Authority report that recommends they continue providing construction-only cover, underwritten by the WA Government, while industry bodies offer voluntary warranty cover for six years post-construction.

The authority says this could bring more insurers to the market.

Many insurers have withdrawn from BWI in recent years. QBE says it is assessing its position in the state – where it provides 90% of cover – but is committed to working with the WA Building Commission to find a long-term solution.

Calliden Group Executive Agency Services Mike Hooton says the insurer will confirm its position after reviewing the report.

Builders Collective President Phil Dwyer says the recommendations will bring a large increase in construction insurance costs, plus the additional charge from the post-construction cover.

“If all those who are taking so much out of our industry were removed, we could provide first-resort [cover] at far less money than we pay now and our industry would not be continually embarrassed,” he told

Master Builders director Michael McLean says insurers have already quit BWI markets in other states, so “it is questionable whether any would continue to operate in a small market such as WA, even with a lower risk exposure”.

His group has told the Economic Regulation Authority it has no appetite for offering warranty cover, and it prefers Tasmania’s model of voluntary BWI.

The NT is also reviewing its BWI, including whether the mandatory system introduced in January is needed.

The Master Builders Association NT operates a fund as the sole source of cover.