What is Builders Warranty Insurance?

Added: (Wed Feb 11 2009)

Pressbox (Press Release) - Builders Warranty Insurance is a very important part of your building plans.

Builders Warranty Insurance is a very important part of your building plans. Always make sure your builder has taken out this insurance, as it will protect you from shoddy work and building faults for over six years after completion, even if the builder has disappeared, died or become insolvent. The insurance policy differs slightly in each state, so there are various types of coverage, but in general, the value of the work must be $12,000 or more - in Queensland $3,300 - before the warranty is a legal necessity. $200,000 is usually the limit for coverage.

In most states - where private companies underwrite the insurance - this insurance is of a last action kind. In other words you must do everything you can to pursue the builder and make him fix the faults. Only as a last resort will the insurance be paid. However, in Queensland where the government underwrites the insurance it is the opposite - you can get your insurance as a first course of action, even if the builder is still operating.

But if you are building or renovating a unit in a skyscraper you are out of luck, as builders don't have to take out warranty insurance on anything that is over three storeys high.

Thinking of building in Victoria? Your favourite builder may have house and land packages Melbourne available as part of their range. display homes Melbourne are also typically available for viewing, so contact your builder if you need to look at a display home to make your decision.