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"Home Warranty Insurance - now there's a term that has struck fear into owners and builders alike.  The collapse of HIH all those years ago really shook the industry to it's core but times have changed since those dark days and there's been some major developments and improvements in this complicated area.  I've put together a quite comprehensive report on this topic and I'm sure you'll get a lot out of it with many refence sites to ensure there is no stone left unturned."

HOME WARRANTY INSURANCE

• What it is
• HWI Regulations
• Specific Information for Licensees
• Multi-storey Buildings & Exemption
• Some Frequently Asked Questions
• NSW Government Home Warranty Insurance Fund
• For Home Owners
• For Builders & Tradies
• For Owner Builders
• For Developers
• Forms & Documents
• Calculate Premiums
• Claims

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What it is

New Home Warranty Insurance arrangements for NSW commenced on 1 July 2010 when the NSW Self insurance Corporation took over as the sole provider of home warranty insurance within NSW and is known as the NSW Home Warranty Insurance Fund.

To quote the NSW Home Warranty Insurance Fund (which is a government-underwritten scheme): "Home warranty insurance provides a safety net for homeowners undertaking residential building projects where the contract price exceeds $20,000. If a builder is unable or unwilling to honour their responsibilities under the building contract, that is, to complete the construction of a dwelling or return and rectify defective work".

And it goes on: "If a builder is unable to honour their commitments under a contract due to insolvency, death, disappearance or the licence of the builder is suspended because the builder failed to comply with a money (compensation) order in favour of the homeowner made by a Court or the Consumer, Trader and Tenancy Tribunal, the home warranty insurance scheme is there to protect homeowners including subsequent purchasers"

This pretty much explains it in layman's terms.  Of course there are lots of 'finer details' (as always) and they can be found if you click on some of the links listed below.

NOTE: As of June 2010, QBE Insurance was appointed as to act as an insurance agent of the NSW Government to assist in managing the transition to the new government-underwritten scheme.  Therefore, QBE is responsible for providing underwriting and claims managements services to the NSW Government.  So, if you are looking for any forms to do with this whole area look no further than the QBE webpage titled NSW Home Warranty Insurance Fund Documents

HWI Regulations...

The announcement regarding the regulations - including some major changes for Home Warranty Insurance - came into effect on July 1st, 2010 and can be found in the Office of Fair Trading's website section called: New home warranty insurance arrangements  But now, even more 'tweaks' have been made and the latest of these amendments came into effect on February 1st, 2012.

Sometimes it's quite a task just keeping up with the merry-go-round of fixes, amendments, tweaks and additions.  Be that as it may, makes sure you look at the wonderful summary compiled by MBS Insurance Services called: Home Building Amendment Act 2011 - NSW.

Another really great summary of these important changes was produced Amy Harper, who works for a firm known as Kells Lawyers.  This summary is called: Home Building Act changes: what home owners and tradespersons need to know.  Don't miss this one as it's laid out in an easy-to-follow format.  Thanks Amy.

For a truly great, indepth explanation of what Home Warranty Insurance (HWI) is and does then go no further than the Office of Fair Trading (OFT) website section called Home Warranty Insurance

The OFT continues with the "good intel" with their version of the latest round of changes called: Legislative Changes-Home Building Amendment Act 2011.  This is worth having a look at too.

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Specific Information for Licensees

For all of you builders and tradies out there - ensure you read the OFT fact sheet on Home Warranty Insurance - Information for licensees to see just what your obligations are.  It's short and to-the-point and will give you most of what you need to know.  Remember: You are the ones required by law to take out this insurance!

Multi-storey Buildings & Exemption

The Multi-storey Buildings section in the information for licensees information page (produced by the OFT) goes over many of the 'twists and turns' associated with this somewhat complicated area.  To find out exactly what IS exempted and what isn't, plus to learn about working on an existing residential building, make sure you click on the link above.

Some Frequently Asked Questions

The Frequently Asked Questions section in the information for licensees information page (produced by the OFT) also will provide you builders and tradies out there with a few of the most common issues of interest when traversing the minefield of Home Warranty Insurance - mainly dealing with exemption conditions.  This section might just help you to clarify some things.

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NSW Government Home Warranty Insurance Fund

As previously mentioned, the new custodian for Home Warranty Insurance in NSW is the NSW Government Home Warranty Insurance Fund which has a good website that covers all the 'must-know' bits.  I guess you could even say it's the 'bible' for all this home warranty stuff and the place to go to find out everything.  You will need to use the navigation tabs across the top of the site though to get into the real juicy stuff.

For Home Owners

All you homeowners out there should click on the Home Owners section (which is in the main navigation menu across the top of the page).  This section has 4 main areas and it might pay for you to look at each one :-

• Introduction
• Information for Home Owners
• Insurance Policies
• Claims

For Builders & Tradies

All Builders and Tradies should go to the Builders & Contractors section and have a good look around the different parts while those who are either NEW to the game or can be classified as a SMALL to MEDIUM sized builder should also go to the Managed Builder Program section.  It might look a little scary at first glance but it does have some really important stuff in it.

The Builders & Contractors section includes the following:-

• Introduction
• Project Applications
• Premiums (everyone wants to know about this one)
• Eligibility (also popular)
• Securities
• Managed Builder Program (see link above)

For Owner Builders

Even Owner Builders are not left out and can be found in the Owner Builders section (which is in the main navigation menu across the top of the page).  There's only 2 sections in this one (thank goodness, I can hear you all say):-

• Introduction
• Project Applications

For Developers

Thought you guys had been left out huh?  Not so fast, as there a section dedicated to you too. Developers are last on the main menu list but certainly not the least, so click on the Developers section to discover what you need to know.  You guys have just 3 sections covering:-

• Introduction
• Project Applications
• Securities

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Forms & Documents

Everybody should be sure to check out the Forms and Documents section.  It can be found under the Home menu item (across the top of the page) about half way down.  It contains downloadable versions of summarised 'Fact Sheets' as well as all forms and other reference documents you might need.  It's a great resource and handy to come back to from time to time.

Calculate Premiums

And, there's even a section on how to calculate the premiums that must be paid.  This is very welcome as you guys can now work out what you're up for.  Go to the Online Premium Calculator section.  It's located under the Home menu item and should be the 2nd item listed.

TIP - Each of the sections I have pointed you to (on the NSW Govt HWI Fund site) contain quite a bit of info but they also contain links - which can be found at the end of each topic - to allow you download a summarised 'fact sheet' version on the topic along with any forms you might need on the topic.  So don't miss these!!  Just remember though that the 'Forms & Documents' section also contains all of these in the one location.  You choose which is easier for you to access.

Another TIP - There are some situations where NO Home Warranty insurance is required - such as for buildings over 3-storeys and some off-the-plan sales, amongst others.  So make sure you know how the project is impacted - if at all.  If you don't know the answer then be sure to ask someone who will know or who can find out for you!!  After all, it's law!  The NSW Dept of Fair Trading (telephone: 13 32 20) is a great place to start if you're unsure.

Claims

If any of you home owners out there DO make a claim under the HWI policy then it might pay for you to look at the Office of Fair Trading's information pages covering the Home Warranty Insurance Scheme Board and the Home warranty insurance claims.  There's some really important 'must-knows' in both of these.  And don't forget to check out the HWI Fund - Claims section too.

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Strata Title Terms and Jargon

If you need to know the meaning of one or more of the common terms mentioned above then have a look at the Strata Terms and Jargon Information page.

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