When you have invested in a property for the purpose of building a house and the builder has died, disappeared or has become insolvent, you can make a claim under the Home Owners Warranty Insurance, available under Home Building Act 1989 (New South Wales Consolidated Act) (the Act).
Home Warranty Insurance Claims
The Act entitles a home owner to file a home warranty insurance claim in the event of financial loss or damage. Such loss or damage caused to the owners may be due to the incomplete or defective work done by a builder, a trades person, a developer or an owner-builder. At the time of filing the claims, the owner must ensure that all the recovery chances have been exhausted but the loss or damages are still standing as it is.
Period and Types of Cover
You must claim for any loss, during the warranty period of insurance of the contract. Our Solicitors will make sure that the claim is filed within the stipulated time. The coverage varies with the nature of the claim.
Section 103B of the Act confers period of cover in case where the work is completed:
- The insurance must provide cover for other loss insured for a period of not less than 12 months after the failure to commence or cessation of the work; and
- The insurance must provide cover for other loss insured in accordance with this Act for a period of not less than:
- In the case of loss arising from a structural defect, 6 years after completion of the work, or
- In the case of loss arising otherwise than from any such structural defect, 2 years after completion of the work.
Where the work is not completed, the warranty period starts on:
- The date, the contract is terminated; and
- If the contract is not terminated – the date the work is ceased.
There will be an extension of 6 months, if the home owner becomes aware of the defects in the last 6 months of the statutory warranty period.
Extent of Cover
A home warranty insurance policy must indemnify all its beneficiaries from the following losses or damages for:
- Any breach of statutory warranty;
- Contractor or supplier providing faulty design;
- Any cost incurred due to alternative accommodation;
- Any loss of deposit suffered;
- Materials and components defect;
- Any non-completion of work; or
- Any legal or other reasonable costs incurred while recovering compensation from the contractor or supplier.
Home warranty insurance policies must provide a cover of at least $340,000 of the loss or damages caused to the owner. Any claim made for incomplete work is subjected to a limitation of 20% of the contract price and up to a maximum of the cover provided by the policy.
Lodging a Complaint
You can lodge a complaint under your home warranty insurance policy, if all the attempts to rectify the defective work by the builder have been exhausted. In the event of rejection of a claim or when the amount paid by the insurer is considered unsatisfactory, the home owner may appeal for the insurer’s decision through the Consumer, Trader and Tenancy Tribunal (Tribunal).
Our Solicitors will advise you about the category in which your loss falls into and the date on which that time runs out. They will carefully scrutinise the insurance contract. They can also help you in lodging a claim on the insurer in respect of the work. If the insurer rejects your claim we will lodge an appeal to the Consumer Trader and Tenancy Tribunal. If the insurer fails to accept or reject the claim, then it is considered as a deemed rejection and they will lodge an appeal with the Tribunal on behalf of you.
If you would like any help in claiming of your Home Owners Warranty Insurance, feel free to contact our team of experts at Owen Hodge Lawyers.