Builders Warranty Insurance (Home Indemnity) in WA
You want to protect yourself from potential financial loss if your builder cannot complete your project or rectify defects in your home. In Western Australia, Builders Warranty Insurance, also known as Home Indemnity Insurance, serves this very purpose, providing homeowners like you with peace of mind during and after construction.
If you are planning to build a new home, renovate extensively, or engage in residential building work exceeding a certain cost, your builder is generally required to obtain Builders Warranty Insurance on your behalf. This insurance protects you in case your builder dies, disappears, becomes insolvent, or refuses to fix defects that arise within a specified period after the work is completed.
The coverage offered by Builders Warranty Insurance in WA typically extends to a few key areas. First, it guarantees that the construction will be completed if your builder defaults mid-project. This means you will not be left with an unfinished home or extensive delays in construction. Second, it provides for the rectification of major defects discovered within the warranty period, which usually lasts six years for structural issues and six months for non-structural defects, depending on the policy and contract. This ensures that if serious problems arise, you can have them fixed without bearing the full financial burden.
To qualify for Builders Warranty Insurance, your builder must be registered with the Building Commission of Western Australia and meet certain eligibility criteria. The insurance is typically arranged by the builder and the cost is often included in your contract price. However, it is your right as the homeowner to ask for a copy of the insurance policy and verify its validity before work begins. This step is important to confirm that your builder has complied with legal requirements and that you are adequately protected.
There are limits to what Builders Warranty Insurance covers. It usually applies to residential building work valued over a specified threshold, such as $12,000. Minor projects or repairs might not be covered under this scheme. Additionally, the insurance only covers defects that would not have been apparent through a reasonable inspection at the time of handover, meaning that you should still conduct thorough checks and engage professional inspections during and after construction.
If you find yourself needing to make a claim under your Builders Warranty Insurance, the process involves notifying the insurer promptly upon discovering the issue. You will typically need to provide evidence such as the contract, correspondence with your builder, expert reports, and other documentation. Understanding your rights and responsibilities under the insurance policy will help you navigate this process more smoothly.
As a final point, Builders Warranty Insurance in WA is designed to protect your investment and provide recourse if your builder cannot meet contractual obligations. By ensuring your builder has appropriate insurance coverage and understanding the scope and limitations of this insurance, you safeguard your home-building project against unexpected financial risks and build with greater confidence.
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