Building Warranty Insurance - A Damn Disgrace.

The subject of Building Warranty Insurance was raised in another thread; Guide To Standards And Tolerances.

viewtopic.php?p=1150236#p1150236

I felt that it deserved its own thread.

The current Building Warranty Insurance "last resort" model applied in some States has long been widely criticised as a one sided financial rort.

The situation is not new. There have been many Government scathing reports, yet the unsavoury situation remains unchanged.

What can be done about this blight?

Do most new home buyers actually care about being ripped off and the lack of protection in the current system?

http://www.abc.net.au/7.30/content/2012/s3654236.htm

http://www.theage.com.au/victoria/victo ... 1g21e.html

http://news.domain.com.au/domain/home-b ... 1dbxh.html

EDITED:
Changed "Builders" to "Building" in thread title.
Changed "Builders" to "Building" in thread text.

I think anyone who has had a bad experience building is unhappy with the current state of affairs. Things will probably only change when the warranty insurance has to be funded by the builder (in the form of registration fees) or by the professional associations who make all sorts of promises about the competence and probity of their members and then will not even handle complaints.

And, come to think of it, why just builders? Why not designers as well who make silly mistakes like putting your overflow relief gully on the highest point of your land have to contribute to Home warranty insurance (as it should be called)?

The HIA profits from Warranty Insurance as they are brokers for the product.

Building Warranty Insurance is known by different terms in different States.

Might as well ad this to your list of links - http://www.builderscollective.org.au/ Take note of the video posted 13 March 2014 at the 12:55 mark.

Damn disgrace is an understatement! Im in Qld, so things are slightly better here, but the QBSA has often been called toothless tiger, and many people have lost huge sums to ratbag builders without compensation. Rorts of this monumental scope should never have been allowed to go on for as long as they have. The quote from the Choice article in the other thread "in 2010-2011 homeowners paid $87.8 million, but only $108,000 was paid out." pretty well defines what a colossal con this is.

Regarding fixing the rort, the main questions I feel are

1. Why is there no apparent accountability of those collected funds taken by forced regulation? Ie if the system is not paying out at a level approaching contributions, then reduce the premium appropriately, or increase the scope for claims. Or disband the scheme.
2. What sort of cohesive lobbying has to be done to the various state govts to have the system made fair?
3. What people might resist change to these rorts as they now stand because they are profiting from having the system remain as it is?

The way the schemes are , even in Qld, there is no way Id let a builder construct a home for me. Too risky. Owner Builder all the way for me!

Good link.

The above is so succinct. Given that the 'insurance' is compulsory and its high cost, it is hard to believe that the scheme as administered is even legal. 'Snorky' Capone would be shaking his head in disbelief.

Here is where 4 million of that money may have gone:

• A substantial increase in the cost of developing the Commission’s e-toolbox customer relationship management system (from an initial cost of $698,000 to over $4.65 million).

from

http://www.cbp.com.au/Updates/Ombudsman ... ion-in-Vic

So they created the Victorian Bulding Authority out of that fiasco, and on the table for 2014 is , quote

"A major reform package will be implemented from July 2014, with VBA to become the one-stop shop for all aspects of building industry oversight, and improvements to the building permit system to be introduced."

The amalgamation of the former Victorian Building Commission and the Victorian Plumbing Industry Commission into the new Victorian Building Authority has not always been smooth.

http://www.theage.com.au/national/build ... 2dyw1.html

Well this topic died as quickly as it started. I would have thought it would be a hot topic since folk getting their new home built for them are being fleeced by this rort.

Could it be the old Australian apathy at work again?

As a staunch proponent of abolsihing state govts and having uniform national laws, this is another area that would benefit from a single national approach.

Note the states come into line when enforcement feathers their nests , such as the penalising drivers outside of their home states thru a national licensing database, but for the Home Owners Insurance scheme they obviously couldnt give a fig.

Its a sad fact that the average voter doesnt realise how much power they have if they united with others as a force. Will we ever see such a force in Australia, demanding accountability of our politicians and public servants, and greater input into govt decisions via electronic referendum? We the poeple need to be consulted a lot more.

If the people dont achieve this eventually, we are going to sink into a quagmire of obfuscating burueaucracy that is impossible to assail. I already get the feeling we are heading to a Matrix-like future, where we are all a subdued body of carrrion that the Govt feeds off.

Failure to protest will be societies eventual ruin. Bring out he guillotines, viva la revolutione!

Oh qebtel! I hope you don't suffer the fate of Danton or Robespierre for that matter!

Excuse the oxymoron but apathy is alive and kicking!



Yep, too much bureaucracy and not enough efficiency...and all the additional fixed overheads to pay from the pool.

Unfortunate fact of life - people must die in the fight against tyranny. Just ask a Syrian.

Sorry I'm going to have to disagree with you here qebtel - George Orwell, who saw more revolutions and civil conflict than most of us, said it all in Animal Farm - regardless of what motivated the revolution in the first place, the pigs will always win in the end. Hopefully we don't have to have a blood bath to fix Builders Warranty insurance.

A Choice review taken from another thread...

Plenty to read here!

http://www.choice.com.au/reviews-and-te ... rance.aspx

The Consumer Action Law Centre is also advocating in this area with some good suggestions:

In addition to overhauling the Building Commission and related bodies, Consumer Action has called for:

the industry dispute resolution system to be mandatory for builders, free for consumers, and empowered to make binding determinations;
the Government to undertake a detailed review of the enforcement framework and sanctions imposed on builders;
the home building warranty insurance scheme to be overhauled so that it offers coverage when a builder won’t complete or repair, not only where a builder is ‘dead, disappeared or insolvent’.


http://consumeraction.org.au/media-rele ... on-system/

Orwell may have seen a lot locally, but there has always been civil conflict and revolutions at any time in History. With social media now, its "just like being there".

Dunno about the pigs themselves, I think its power & greed that always corrupts absolutely. We need a form of govt

• that makes itself fully accountable at all levels through checks and balances
• where the population are politically astute and active to maintain the above

This insurance scheme highlights how deficient we are in these regards. And the other pigs let Napolean get away with far too much, so they are to blame as well. Meanwhile Qld politicians have awarded themsleves an $80K payrise. Noice.

Looks like something is happening after all. I was sent this link by the Consumer Action Law Centre:

http://premier.vic.gov.au/images/140407 ... sumers.pdf