13/02/2013 - 11:15

Builders call for insurance reform

13/02/2013 - 11:15

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Builders call for insurance reform

WESTERN Australia’s peak building industry group has called for urgent reform after the state’s largest home indemnity insurer, QBE, announced a 40 per cent premium price hike.

There are currently only two insurers providing indemnity insurance for builders in WA, while QBE is the only company able to insure builders with a turnover of more than $3 million.

Master Builders Western Australia director of housing Gavan Forster said QBE’s near monopoly for indemnity insurance highlighted the need for urgent government intervention.

Mr Forster estimated the price increase would result in $550 of extra costs for a $250,000 house.

“A monopoly insurer can have the power to dictate the volume, type, timing and amount of building a registered builder can undertake,” Mr Forster said.

“The increase announced by QBE will hit at affordability for new home buyers."

The issue of indemnity insurance has been a major concern for the Master Builders since 2010, when Vero, which had been the leading insurance firm, announced its withdrawal from the market.

Master Builders recommended the state government make home indemnity insurance voluntary.

In WA, home indemnity insurance is required for all residential building work valued at more than $20,000.

 

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