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Industry News, Latest News, New South Wales

Feedback sought on NSW home building insurance scheme

The New South Wales Government is calling for public submissions to improve the compulsory home building compensation insurance scheme for builders and homeowners.

Customer Service and Digital Government Minister Victor Dominello said that the proposals presented in the discussion paper, published by the State Insurance Regulatory Authority (SIRA), will help better support homeowners.

“The family home is still the Australian dream and each year more and more families are building or renovating their greatest asset,” Dominello said.

“With almost 90,000 home building projects insured last year and increasing pressure in the housing construction market, the need for an effective insurance scheme has never been stronger.

“SIRA’s discussion paper proposes a range of reforms that offer clear steps to strengthening the scheme’s support for homeowners when their dreams don’t go to plan.

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“We encourage homeowners and industry stakeholders to share their views on how the scheme can be improved.”

Company failures have been proportionately higher in the construction industry compared to other industries – in the 2021 calendar year, 24 per cent of total company insolvencies in NSW were in the construction industry.

“Home Building Compensation is a complex insurance scheme which involves managing insolvency risks in an industry where those risks are inherent and longstanding,” Dominello said.

“As a result, the scheme was run at a loss for many years and has had a chequered history ever since the collapse of HIH Insurance in the early 2000s.”

Key proposals being considered include:

  • Changing the amount of insurance cover offered by the scheme
  • Allowing homeowners to claim earlier in the dispute process
  • Extending cover to victims of unlawfully uninsured home construction
  • Updating the value of building work for which insurance is required
  • Changes to types of work that may be exempt from insurance, such as in high rise residential buildings

The public consultation is open until 16 August.

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