Experience with HBCF insurance claim process NSW

Chino21 · Jul 15, 2023 10:24 pm

I am hoping to be able to make a claim with icare in the near future as pretty sure my builder is about to go insolvent. No work for months, ignoring communication attempts, staff leaving, subbies havent been paid for months etc. Have lodged fair trading, yet to hear. Have also lodged a loss
notification form with icare.

For anyone that has been through this process or is going through it, how long has it taken, how do they calculate the claim. We are close to final stage, but the works outstanding are probably about double what I owe. Does the insurer offset the amount you had left to pay and do they pay you in excess of final stage payments remaining? There is lots of infor about eligibility etc and I know they do an independent report etc but keen to hear of experiences in practice.

agent0387 · Jul 19, 2023 1:09 pm

Hi There,

I am in almost the exact same boat as you, everything you mentioned pretty much applies to me also and we are at a similar close to final stage as well.

I will also be submitting a notification of claim with icare and dispute through fair trading asap.

Keen to get some feedback/advice from other users on this procedure and any advice and tips to help safeguard ourselves and help us ensure we do due diligence to cover our livelihoods!

SydneyPSSS · Jul 29, 2023 2:48 pm

Hey, do you guys have any updates with claiming HBCF?

agent0387 · Jul 31, 2023 4:32 pm

Have you submitted your icare HBCF loss notification form?

I strongly urge you do this (no matter the outcome), it's to safeguard you and your asset.

You don't need to make a claim yet, but at least submit the form so you provide notice of intent to claim and do not pass the expiry date for the insurance policy.

If your builder completes the works then great nothing you need to do, if not then at least you have submitted your intent and the expiry date of the policy will not apply.

SydneyPSSS · Aug 15, 2023 12:04 pm

agent0387

Have you submitted your icare HBCF loss notification form?

I strongly urge you do this (no matter the outcome), it's to safeguard you and your asset.

You don't need to make a claim yet, but at least submit the form so you provide notice of intent to claim and do not pass the expiry date for the insurance policy.

If your builder completes the works then great nothing you need to do, if not then at least you have submitted your intent and the expiry date of the policy will not apply.

Yes, I have submitted the Loss Notification form. We're with Fair Trading now, they've given the Builders deadlines for works to be completed. Unsure if Builder can make those deadlines, looks tight.

have you made the claim yet?

Bluespeckledeggs · Mar 13, 2024 8:46 pm

Hi Sydney PSSS and agent0387 and Chino21, and any other forum members - have you gone through the NSW Home Building Compensation Fund (HBCF) claim process and completed your builds now? our builder recently went into liquidation so the ‘trigger event’ has occurred for us to lodge a HBCF claim and we would be most grateful for any advice/tips and recommendations regarding the claim process..

We have had lengthy delays and excuses after excuses from our builder over many years and now finally it has come to this with our build half finished and we are emotionally and financially distressed. Although our builder essentially disappeared (phone disconnected and office emptied out) HBCF/ICare advised us that a ‘trigger event’ has not occurred yet, given that the builder is a company, we could not make a claim yet until they were under liquidation or their licence was canceled.

Now that the trigger event has ultimately occurred, we now need to get our head around the whole claim process and how to fill in the form. There seems to be very little shared by way of past experience with the claim process so any help would be much appreciated.

Some of the questions we have so far are:

1. The HBCF guide for homeowners seems to suggest that the HBCF only assesses the claims that the homeowner specifies in the claim form so is reliant/dependent on what the homeowner submits. If this is true, then homeowners are really in a disadvantaged position as we are not qualified/skilled to be able to identify any defective work - and therefore, how do we know that we should be making a claim for defects for something (especially when something is half completed (some parts complete and some parts incomplete) ?

2. Alternatively, if the building inspector that HBCF appoint does in fact do a thorough inspection and identifies any defects that can be claimed - can this be relied upon as a sign-off on the items where NO defects were identified?

3. For incomplete work, does HBCF get into contact with the Certifier to see what has passed/certified and what hasn’t ?

4. Is there any way that final OC approval will be guaranteed under the new builders that are appointed under the HBCF claim process?

Any help would be much appreciated

Is

SydneyPSSS · Mar 14, 2024 6:45 am

Hi, I know how hard it is to get information, I researched the whole internet to find answers, but the best way to get information was to talk to builders. We spoke to probably over 15 builders. Our build still not finished, HBCF took 4 months to settle our claim in Feb 2024. We knew early that our builder was in trouble and thank God we acted straight away and submitted a loss notification form, it was 6 months after that our builders went into liquidation which was Oct 2023. Just remember that you only have 12 months to put claim in for defective work, our builders tried to delay us as mush as possible but luckily, our loss notification form was submitted within the timeframe. Our builder stuffed us around for almost 2 years, only now, our new builder has started to rectify defective work.

1.The HBCF guide for homeowners seems to suggest that the HBCF only assesses the claims that the homeowner specifies in the claim form so is reliant/dependent on what the homeowner submits. If this is true, then homeowners are really in a disadvantaged position as we are not qualified/skilled to be able to identify any defective work - and therefore, how do we know that we should be making a claim for defects for something (especially when something is half completed (some parts complete and some parts incomplete) ?

We got a building inspector to do a report (we did not give this report directly to HBCF) we used it to understand what needed to be rectified. Our builders were a nightmare, and after the first year of delays, we looked at our worst-case scenarios and started talking to other builders and as you mentioned it was extremely difficult to understand the HBCF/ICARE process and limited information from other people’s experiences. So, by the time our builder went into liquidation, we already knew what steps to take. We found a builder who was willing to help us, and we gave the inspectors report (Scott schedule) to them, with that information the builder was able to assess what needed to be rectified and put their cost which we submitted in our claim. Our claim was more than the $340000 cap.
If your claim comes under the cap, your builder can submit further claims as the building commences. for example, the builder may not be aware that there is a plumbing issue until he gets to that stage, It is possible that other defective works can come up later in the build which your builder can still claim.

Just remember that you can also include rent in your claim.

2. Alternatively, if the building inspector that HBCF appoint does in fact do a thorough inspection and identifies any defects that can be claimed - can this be relied upon as a sign-off on the items where NO defects were identified?

HBCF told us that they did send an inspector, and that person did not disagree with our claim and in fact supported it. like I said, it would be useful to get a inspector yourself, ours cost $5000. You can claim this back on insurance as well. The only reason we didn’t submit ours to HBCF is because it was a Scott Schedule which had approx. costs and we wanted to submit our claim with our builders’ costs.

I know some people might say “well if your certifier has signed it off then you can’t claim any defective work” this is not necessarily true, because works can become defective over time especially due to exposure to weather etc. so, you can still claim defective under those circumstances. We had mould, rust, and damaged frames from weather exposure and frames not properly stored or installed like bolts missing. You can also claim overgrown vegetation, site clean up, unsecured etc..

3. For incomplete work, does HBCF get into contact with the Certifier to see what has passed/certified and what hasn’t ?

HBCF will request documents from you, they may even request directly from certifier and these will include certificates of works already passed. Your situation would be different from ours as your house is halfway done and ours at frame stage.

4. Is there any way that final OC approval will be guaranteed under the new builders that are appointed under the HBCF claim process?

Yes, You will get OC as long as new builder has all certificates, I heard that HBCF does allow partial OC, so some owners can move in and still finish homes like driveway and yard.

You can use HBCF's builders or find your own. Im not sure where u are, but if you like to speak with my builder I can let him know.

BuildingandLegal · Mar 14, 2024 3:11 pm

Your best bet is to have a "GOOD" building inspector do a full inspection of the site and the works completed to date with what is required to complete. Include this with your application.
Unfortunately, NSW's Home Warranty is not like Qld's (Qld is a catch all system, it comes into play to provide help in about 95% of the time). NSW is 1) If the Builder Dies or 2) If the builder loses their License.
If he is still trading you would need to lodge a complaint against breach of the contract or defective work or unsafe work with Fair Trading (yes I know they have changed their name) and have them issue a direction to force the issue.

Bluespeckledeggs · Mar 18, 2024 9:22 pm

Thank you very much SydneyPSSS for taking the time to reply and for sharing your experience with us. We are very grateful for all the information you shared - it is invaluable to be able to learn from you how you went about the HBCF claim process especially as there is very little information available from homeowners who have gone through the process.

I must say I had to read your reply a few times to see if I understood the timing/timeline of the steps you undertook as it is a bit different to what I was expecting the process to be. From my understanding, the steps you took were that you firstly engaged a Building Inspector to prepare a Scot Schedule that listed out all the items of incomplete/defective work (which included the estimate costs for each of these items). Afterwards, you then found a builder who was willing to complete your home build, and this builder provided you with their costs (fees) to complete each of the items listed in the Scott Schedule. And then, it was only after these two steps, then you submitted the Claim form to HBCF who then sent their own building inspector to inspect the works and assess the claim you made. Is my understanding correct?

The process I was envisaging was to 1. Submit the HBCF claim (either with or without our own building inspector report). 2. After we submit the form, then HBCF /ICare will send a building inspector to inspect the works who will then determine/assess the works that are incomplete. 3. HBCF will then put to tender the work to be completed and call for tenders from new builders to complete the work and what their fee/price/costs will be.

I guess the main difference between what you have shared is that you went ahead and found your own (and likely preferred!) builder first without HBCF involvement. This is something that we hadn’t thought of.

Thank you for sharing how much it cost for you to obtain a building inspector report (Scott’s schedule) - as this is quite a huge outlay, we have to consider the cost/benefit, pros/cons etc whether to get our own or rely on the building inspection report that HBCF does…..

Thank you very much again for sharing your insights with us.

B.S.E

PS - I am mindful that under the HBCF Policy cover - claims for “incomplete” work are separate to claims for “defects”. which can be either “major” or “minor” defects all terms that are defined under the Policy and have different timeframes /periods of cover - so homeowners need to carefully read and note this.

Bluespeckledeggs · Mar 18, 2024 10:04 pm

Thank you BuildingandLegal for sharing your thoughts and recommending that we get a building inspection report. Our builder is under the administration process so we will submit a Hbcf claim.

Bluespeckledeggs · Mar 18, 2024 10:08 pm

There is a booklet on the HBCF website HBCF Claims Information for Homeowners that is helpful so sharing in case it helps anyone else..but we still have things we are unclear about so we are still trying to understand the process more, eg how compensation amount is calculated etc

https://www.icare.nsw.gov.au/-/media/ic ... owners.pdf

SydneyPSSS · Mar 20, 2024 11:22 am

Bluespeckledeggs

Thank you very much SydneyPSSS for taking the time to reply and for sharing your experience with us. We are very grateful for all the information you shared - it is invaluable to be able to learn from you how you went about the HBCF claim process especially as there is very little information available from homeowners who have gone through the process.

I must say I had to read your reply a few times to see if I understood the timing/timeline of the steps you undertook as it is a bit different to what I was expecting the process to be. From my understanding, the steps you took were that you firstly engaged a Building Inspector to prepare a Scot Schedule that listed out all the items of incomplete/defective work (which included the estimate costs for each of these items). Afterwards, you then found a builder who was willing to complete your home build, and this builder provided you with their costs (fees) to complete each of the items listed in the Scott Schedule. And then, it was only after these two steps, then you submitted the Claim form to HBCF who then sent their own building inspector to inspect the works and assess the claim you made. Is my understanding correct?

The process I was envisaging was to 1. Submit the HBCF claim (either with or without our own building inspector report). 2. After we submit the form, then HBCF /ICare will send a building inspector to inspect the works who will then determine/assess the works that are incomplete. 3. HBCF will then put to tender the work to be completed and call for tenders from new builders to complete the work and what their fee/price/costs will be.

I guess the main difference between what you have shared is that you went ahead and found your own (and likely preferred!) builder first without HBCF involvement. This is something that we hadn’t thought of.

Thank you for sharing how much it cost for you to obtain a building inspector report (Scott’s schedule) - as this is quite a huge outlay, we have to consider the cost/benefit, pros/cons etc whether to get our own or rely on the building inspection report that HBCF does…..

Thank you very much again for sharing your insights with us.

B.S.E

PS - I am mindful that under the HBCF Policy cover - claims for “incomplete” work are separate to claims for “defects”. which can be either “major” or “minor” defects all terms that are defined under the Policy and have different timeframes /periods of cover - so homeowners need to carefully read and note this.

I apologise for any confusion, but your understanding is correct. We approached our situation differently based on advice from someone who had experience with Icare.
They had encountered issues with their claim due to missing documents, relying solely
on Icare's inspector for defects, and not having a backup builder in place.

To avoid these pitfalls, we conducted our own investigation before submitting our claim. When our original builder faced liquidation in October 2023, we waited until November 2023 to submit our claim to Icare. This allowed us to submit all necessary documents at once, streamlining the process, and Icare settled the claim in February 2024.

Our initial builders stopped work after receiving frame payment. We sought advice from various sources and initially planned to go through NCAT. However, the builders went into liquidation.

We sought a second builder as a precaution due to delays and concerns with the first builder. We consulted Fair Trading, who advised us to initiate a trigger event by taking our case to NCAT. After Fair Trading issued a rectification order and deadlines to the builder, and the builder failed to comply, we obtained a Scott schedule and prepared to go to NCAT with a second builder. However, before proceeding, we learned that the original builder was liquidated. We monitored the ASIC website, gathered the required paperwork, and promptly submitted our claim to Icare once the liquidation was confirmed.

It is important to note that Icare only pays 20% of the original contract amount for incomplete works. For example, if your contract was $600,000, Icare will pay $120,000 for incomplete works. Therefore, for defect works, you can only claim up to the remaining cap of $340,000, which is $220,000. Hopefully you will have enough to complete your build.

Winston hills · Jul 26, 2024 4:45 am

SydneyPSSS

Hi, I know how hard it is to get information, I researched the whole internet to find answers, but the best way to get information was to talk to builders. We spoke to probably over 15 builders. Our build still not finished, HBCF took 4 months to settle our claim in Feb 2024. We knew early that our builder was in trouble and thank God we acted straight away and submitted a loss notification form, it was 6 months after that our builders went into liquidation which was Oct 2023. Just remember that you only have 12 months to put claim in for defective work, our builders tried to delay us as mush as possible but luckily, our loss notification form was submitted within the timeframe. Our builder stuffed us around for almost 2 years, only now, our new builder has started to rectify defective work.

1.The HBCF guide for homeowners seems to suggest that the HBCF only assesses the claims that the homeowner specifies in the claim form so is reliant/dependent on what the homeowner submits. If this is true, then homeowners are really in a disadvantaged position as we are not qualified/skilled to be able to identify any defective work - and therefore, how do we know that we should be making a claim for defects for something (especially when something is half completed (some parts complete and some parts incomplete) ?

We got a building inspector to do a report (we did not give this report directly to HBCF) we used it to understand what needed to be rectified. Our builders were a nightmare, and after the first year of delays, we looked at our worst-case scenarios and started talking to other builders and as you mentioned it was extremely difficult to understand the HBCF/ICARE process and limited information from other people’s experiences. So, by the time our builder went into liquidation, we already knew what steps to take. We found a builder who was willing to help us, and we gave the inspectors report (Scott schedule) to them, with that information the builder was able to assess what needed to be rectified and put their cost which we submitted in our claim. Our claim was more than the $340000 cap.
If your claim comes under the cap, your builder can submit further claims as the building commences. for example, the builder may not be aware that there is a plumbing issue until he gets to that stage, It is possible that other defective works can come up later in the build which your builder can still claim.

Just remember that you can also include rent in your claim.

2. Alternatively, if the building inspector that HBCF appoint does in fact do a thorough inspection and identifies any defects that can be claimed - can this be relied upon as a sign-off on the items where NO defects were identified?

HBCF told us that they did send an inspector, and that person did not disagree with our claim and in fact supported it. like I said, it would be useful to get a inspector yourself, ours cost $5000. You can claim this back on insurance as well. The only reason we didn’t submit ours to HBCF is because it was a Scott Schedule which had approx. costs and we wanted to submit our claim with our builders’ costs.

I know some people might say “well if your certifier has signed it off then you can’t claim any defective work” this is not necessarily true, because works can become defective over time especially due to exposure to weather etc. so, you can still claim defective under those circumstances. We had mould, rust, and damaged frames from weather exposure and frames not properly stored or installed like bolts missing. You can also claim overgrown vegetation, site clean up, unsecured etc..

3. For incomplete work, does HBCF get into contact with the Certifier to see what has passed/certified and what hasn’t ?

HBCF will request documents from you, they may even request directly from certifier and these will include certificates of works already passed. Your situation would be different from ours as your house is halfway done and ours at frame stage.

4. Is there any way that final OC approval will be guaranteed under the new builders that are appointed under the HBCF claim process?

Yes, You will get OC as long as new builder has all certificates, I heard that HBCF does allow partial OC, so some owners can move in and still finish homes like driveway and yard.

You can use HBCF's builders or find your own. Im not sure where u are, but if you like to speak with my builder I can let him know.

Hi Sydney psss

I'm in the same situation now. I just found out yesterday that my builder went to administration and his licence has been cancelled. He advised me to start process of making a claim to the icare home insurance. Would you mine please give me your builder who help you out .I will do same as you did.

Thanks so much for sharing your experience.

Regards
Winston hills

SydneyPSSS · Jul 27, 2024 9:24 am

Hi, I hope this helps.
Icare took 4 months to settle our claim. We prepared a Scott schedule outlining rectification/variation costs and submitted it to our new builder, and they provided thier quote which we gave to Icare. Typically, Icare provides 20% of the contract price for incomplete works, with additional costs for defects. For example, if the contract price is $600k, Icare would initially pay $120k. If the rectification cost is $80k, Icare would pay a total of $200k. You can also claim rent, storage costs, legal fees, and inspection fees, capped at $340k. It's important to justify your claims and present all possible expenses. It's advisable to make defects appear more serious than they are, as additional issues may arise later. You can continue to make claims with Icare as the new builder progresses until you reach the cap of $340k.
In regards to “pay you in excess for final stage payments”. Im assuming you mean, if the final payment is $50k will Icare just give the $50k or give the full $340K. Icare sees it like, Did the builder build correctly? If the answer is yes, then you can’t claim for defects but you can claim for incomplete work which is 20% of your contract price, so you should get $120K. But that’s why you need to find defects, it could be very minor such as the door height is wrong.
Everyone’s case is different so just be careful how you go about it.

Winston hills · Jul 27, 2024 9:35 am

SydneyPSSS

Hi, I hope this helps.
Icare took 4 months to settle our claim. We prepared a Scott schedule outlining rectification/variation costs and submitted it to our new builder, and they provided thier quote which we gave to Icare. Typically, Icare provides 20% of the contract price for incomplete works, with additional costs for defects. For example, if the contract price is $600k, Icare would initially pay $120k. If the rectification cost is $80k, Icare would pay a total of $200k. You can also claim rent, storage costs, legal fees, and inspection fees, capped at $340k. It's important to justify your claims and present all possible expenses. It's advisable to make defects appear more serious than they are, as additional issues may arise later. You can continue to make claims with Icare as the new builder progresses until you reach the cap of $340k.
In regards to “pay you in excess for final stage payments”. Im assuming you mean, if the final payment is $50k will Icare just give the $50k or give the full $340K. Icare sees it like, Did the builder build correctly? If the answer is yes, then you can’t claim for defects but you can claim for incomplete work which is 20% of your contract price, so you should get $120K. But that’s why you need to find defects, it could be very minor such as the door height is wrong.
Everyone’s case is different so just be careful how you go about it.

Hi Sydney Psss

I'm on the same situation now,just found out that my builder is on liquidation, I have paid him 85%already even though the job is probably on 60%.
I'm gonna hire a building inspector like you did and a builder as well.
Can you please share me your builder's contact details.
Thanks for sharing your experiences yo us, it's very much appreciated.

Regards
Alvin

Blossom78581 · Sep 04, 2024 9:31 pm

Hi everyone,

Sorry to hijack this post but we have just been told our builder has gone into liquidation and we are at practical completion.

The liquidators have told us today to contact hbcf to claim insurance for the unfinished work and defects.

Several people have told me we need to seek legal advice prior to lodging our claim, but I just don't understand why?

Has anyone needed legal advice prior to claiming through Hbcf?

Ashington Homes · Sep 05, 2024 4:20 am

Blossom78581

Hi everyone,

Sorry to hijack this post but we have just been told our builder has gone into liquidation and we are at practical completion.

The liquidators have told us today to contact hbcf to claim insurance for the unfinished work and defects.

Several people have told me we need to seek legal advice prior to lodging our claim, but I just don't understand why?

Has anyone needed legal advice prior to claiming through Hbcf?

Hi Blossom

Sorry to hear.

I hope you don't mind me asking what is possibly a dumb question....I haven't been in your position before so I don't understand the process.

My question is, if you are at PC, why do you need to lodge an insurance claim? Like what is your loss that you need to be compensated for?

Your home is finished so why can't you just move in. ICARE will still cover your 6 year structural warranty won't they?

Again, I don't understand the process, I just pay them a ton of money every year so you probably have a very good explanation

Cheers

Simeon

Blossom78581 · Sep 05, 2024 6:34 am

Ashington Homes

Blossom78581

Hi everyone,

Sorry to hijack this post but we have just been told our builder has gone into liquidation and we are at practical completion.

The liquidators have told us today to contact hbcf to claim insurance for the unfinished work and defects.

Several people have told me we need to seek legal advice prior to lodging our claim, but I just don't understand why?

Has anyone needed legal advice prior to claiming through Hbcf?

Hi Blossom

Sorry to hear.

I hope you don't mind me asking what is possibly a dumb question....I haven't been in your position before so I don't understand the process.

My question is, if you are at PC, why do you need to lodge an insurance claim? Like what is your loss that you need to be compensated for?

Your home is finished so why can't you just move in. ICARE will still cover your 6 year structural warranty won't they?

Again, I don't understand the process, I just pay them a ton of money every year so you probably have a very good explanation

Cheers

Simeon

Hi Simeon,

We still have some incomplete work, nothing major, but it is still work that's part of the contract and a requirement for our build.

Our roof also hasn't been built to standard and needs to be rectified.

Until this work is done we can't get an OC. We've been pursuing the builder for a while now, had a letter of demand sent and been to the building commission not too long ago who contacted them, builder said they know they have to do the work and now they have gone into liquidation.