Last year on 4 June, Master Builders Association Insurance Services advised members of some immediate changes, and potential changes, to the Domestic Building Insurance Scheme in Victoria.

Now, some 12 months on, MBAIS provides a further update on the additional changes that are being implemented from 1 July this year, under the Building Legislation Amendment Bill (Victoria).

Effective from 1st July 2014:

  • The minimum requirement for Home Warranty cover increased from $12,000 to $16,000
  • The maximum amount payable under the policy increased from $200,000 to $300,000.

Effective from 1st July 2015:

  • An additional “trigger” for a claim will be introduced, whereby a builder has not complied with a VCAT rectification ruling or court order after 30 days.

This means that a home owner will now be able to lodge a claim against a builder’s eligibility policy, even though the builder has not died, disappeared or become insolvent.

Whilst we are not yet privy to the entire process that will be enacted under this claim trigger, we expect that the VMIA, once notified of a claim, will more than likely monitor or even limit your DBI Facility until any rectification or replacement work under the order is complete. At the same time, they are likely to request a review of your Facility, and potentially monitor your Facility very closely until they are satisfied with the actions you have taken. This may even extend to limiting your future activity if the matter isn’t dealt with appropriately in their eyes.

  • The VMIA are launching a new consumer search portal on their website.

In another change to assist consumers, the VMIA are launching a new online portal that will allow consumers to see if a builder has eligibility in the same name that the relevant building contract has been signed in. In addition to this, consumers will also be able to request details in relation to a specific Home Warranty certificate issued for a particular address, accessing information such as the certificate number; inception date; the building entity who carried out the work, and if previous claims have been made against the certificate for defective or incomplete works.

The VMIA will soon be writing to all sole traders and partnerships seeking your consent to have your details included within this new portal. If you are a company, the VMIA do not need to seek your consent. You may opt out of these arrangements, but if a consumer is unable to find your business within this search mechanism, they may make negative assumptions about your insurance status.

All existing DBI application forms will also be updated to incorporate these changes. Visit www.mbais.com.au or call on 1 800 150 888 for further advice in relation to these changes.