About Builders Collective of Australia

We were born out of the dire need for representation of the small builders in the nation when we were excluded by the major players after the criminal collapse of HIH when they masterminded the Last Resort Home Warranty Insurance regime.

The Australian Consumers Association have summed up this controversial warranty scheme and stated it “Makes a Mockery of Consumer Protection” and on the ABC 7.30 Report in Jan 2007 referred to these policies as JUNK INSURANCE.

From a builder’s perspective he or she must provide the family home to the insurer to fully underwrite any future consumer’s claims as the criteria demands he must obtain what is termed insurance eligibility on an annual basis prior to being registered and being able to obtain a building permit.

In other words the builder becomes the insurer but does not receive the premium for the policy, and as the regime has no dispute and resolution mechanism it relies only on the tribunals, and what may start as a minor problem escalates quickly to a very significant major problem involving many, and the costs are horrendous and time frames protracted.

So what is the answer? If we take note of all the Australian consumer advocates they without exception endorse the principles of the self funding Queensland building services authority as appropriate. It is a Government run monopoly, totally transparent, first resort, and provides cover to a limit of $400,000, and importantly a claim is dealt with within 28 days.

Its been a long running scheme that does provide protection to both parties that any reasonable person would accept as appropriate and is totally accepted by both builders and consumers.

Tasmania dumped the privatised warranty in July 2008 stating their consumers and builders would be better served without the insurance. They elected to adopt a mandatory robust dispute and resolution service as the first port of call for a dispute all without insurance. Better for all they still say!

So who are the detractors? Of what appears to be the answer to such a controversial and vexed issue? The Australian Senate Inquiry in 2008 found there were only two supporters of the status quo being the Insurance Council of Australia and the Housing Industry Association who are the dominant financial beneficiaries of this insurance.

We were alerted to previously unknown official data being collected by the Commonwealth Ombudsman Service and this data was publicly available during the course of the Senate Inquiry but withheld by those who knew of its existence.

The Ombudsman Service found that Warranty Insurance is the worst performing insurance in Australia by a massive 1250%  and consistent with the expose undertaken by a major Sydney newspaper last year that found the claims to premium ratio of warranty was only a meagre 7% compared to other classes of insurance that have around a 75% claims ratio.

So why are our elected representatives beholding to the Insurance Council of Australia and HIA and maintaining such a disgraceful public policy that has caused so much distress and loss for so many Australian homeowners and builders is NOT supported by most of the building industry and generates millions of dollars in revenue for the insurance companies and their agents.

Our fight for good policy, justice and equity continues.


Yours Sincerely,

Phil Dwyer
National President

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