SIRA to conduct home building insurance audit in NSW
SIRA to conduct home building insurance audit in NSW | Insurance Business Australia
Property
SIRA to conduct home building insurance audit in NSW
Businesses that build homes in the state are required to buy HBC insurance
Property
By
Roxanne Libatique
The State Insurance Regulatory Authority (SIRA) will conduct a home building insurance audit in new South Wales (NSW) to protect homeowners.
Beginning September 2023, SIRA will conduct a compliance audit of businesses that build homes in NSW to ensure they have compulsory home building compensation (HBC) insurance.
The first stage of the audit will focus on 100 businesses that build “Class 1” homes, such as houses and duplexes. SIRA will prioritise businesses based on the number of projects without matching insurance records or where the construction certificate and insurance dates indicate a risk that the work might have started or payments have been taken before insurance was purchased.
“Selection for audit does not mean a business has done anything wrong, as there can be a lawful reason,” SIRA said.
Compliance issues
Businesses that build homes in NSW must buy HBC insurance for each residential building work project over $20,000 (including GST), unless exempt. The insurance protects homeowners as a last resort if a business cannot complete their work or fix defects.
The types of project requiring HBC insurance include building, trades, or specialist work done to a home, such as the construction of a house or an apartment building up to three storeys, renovation to residential buildings of any number of storeys, and home additions such as swimming pools.
Businesses must buy HBC insurance before requesting or accepting any money for the work (including a deposit) or starting the residential building work.
However, SIRA reported that some businesses have been taking money from customers or starting their work without insurance, and in some cases, not buying insurance at all.
“This unlawful conduct has caused considerable financial loss to some homeowners,” SIRA said, adding: “People building a home can help protect themselves by checking that the business they have contracted has given a certificate of HBC insurance.”
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