Builders Collective Australia

Builders Warranty Insurance

the great “scam”

These stories were on the front page of the AGE newspaper and one would hope they will prick the conscience of the Baillieu Government as this matter is now well beyond a joke and hurting Victorians in the extreme.

There is more to life than money and this insurance can be dropped with a stroke of a pen by your Government right now!


Victorians fleeced on insurance

http://www.theage.com.au/victoria/victorians-fleeced-on-insurance-20110614-1g21e.html


'Missing' builder could cost family its home

http://www.theage.com.au/victoria/missing-builder-could-cost-family-its-home-20110614-1g1un.html

Today tonight

presents a Consumer's home as their biggest financial investment of a

lifetime and asks is their new home protected by any warranty at all?

The answer is "No"

Click on this link: Worst house of the year - Today Tonight on Yahoo!7

Building act fails as does Builders Warranty Insurance

The Baillieu Government say they will fix it?

We are waiting !!!!

Government and insurers face class action over dodgy warranty scheme

EXCLUSIVE: HUNDREDS of small family owned Australian builders are facing extinction because of Builders Warranty Insurance, according to a survey of over 1000 builders by PropertyReview.com.au conducted over the past month.

Builders in both Victoria and NSW are facing the increasing dilemma of not being able to get warranty insurance because thousands don’t meet new exacting insurance companies criteria. Insurance companies take none of the risk on warranty insurance and in fact are ‘illegally’ making builders sign indemnities where they personally face the total risk of the worthless insurance.

Leading lawyers tell PropertyReview.com.au that the home warranty insurance in NSW and Victoria is potentially illegal. According to section 12 of the Insurance Act 1973 a reinsurer must be licensed under the Act otherwise they commit an offence. No builder in Australia is a registered insurance company despite facing 100% of the risk of home warranty insurance.

One leading barrister who did not want to be named told PropertyReview.com.au: “It’s a rort. Governments know it’s at best worthless and at worst illegal, but they do nothing. They seem willing to watch hundreds of small family businesses go out of business.”

She indicated that a class action if successful could be one of the largest payouts in Australian history.

“The losses by builders who have been forced by State governments to sign up as illegal insurers over almost a decade is immense.”  

PropertyReview.com.au has exclusively learned that a class action is now brewing against insurance companies, the Victorian and NSW governments with hundreds of builders having signed up for the class action in the past three weeks. Senior barristers and a leading class action law firm have been working on the case secretly for the past six months.

It is expected an application and statement of claim will be filed in the Federal Court early in the New Year with respondents being the NSW and Victorian governments as well as a number of insurance companies. Already more than 250 builders have signed up to the action, many donating thousands of dollars to the cause. Many more are expected to sign before the action is filed.

The majority of the builders are in Victoria and New South Wales where the regime of worthless home warranty insurance rules.

Both consumer advocates and building representatives say that home warranty insurance ruled over by successive Labor governments have forced builders to the wall.

“The only people making money out of the home warranty insurance scheme described by Choice as ‘junk insurance’ are insurance companies, their brokers, and state governments,” one former senior HIA member told PropertyReview.com.au. He did not want to be named due to potential reprisals from insurance companies.

A builder has to die, disappear or become insolvent for a consumer to collect on home warranty insurance.

The NSW Labor government has refused to budge on their worthless home warranty insurance scheme despite the years of complaints from both builders and consumers.  The NSW Opposition has pledged to rid NSW of warranty insurance in line with either the Queensland or Tasmanian schemes.

The potential class action poses a real dilemma for the newly elected Baillieu Victorian government, which in its years of Opposition, declared it would rid Victoria of home warranty insurance.

Premier Ted Baillieu, his deputy Peter Ryan have both stated publicly in the past that they would do away with warranty insurance.

However, early representations to senior Victorian government minister Matthew Guy have fallen on deaf ears. Mr. Guy or his advisors have not returned any calls on the matter.

Rumours are rife insurance companies assisted in the funding of the Victorian Coalition at the recent State election to shore up their campaign to ensure the lucrative warranties continue to flood the insurance companies coffers.

Hundreds, possibly thousands, of Victorian builders and their families intend marching on Parliament early in 2011.



Nelson Yap, Editor.

PropertyReview.com.au

The final report from the Victorian Upper House Inquiry makes clear that there is still much to reform if we are ever to have effective consumer protection for our building industry.  It is evident that the current scheme is failing to meet the needs and expectations of both builders and consumers.

Significantly, the inquiry was unwilling to make a clear determination due to the conflicting sets of data still being presented by the HIA, the Insurance Industry and the Government - all representing a vested interest that is keen to keep the status quo in place.

Each is continuing to reap very high levels of profit from a scheme that is leaving consumers unable to access funds that are desperately needed to simply have their homes fixed and that financial detriment is running at $1.6 Billion per annum according to Minister Robinson's report.

By taking the scheme away from private insurers, the Victorian Government has effectively determined that last resort Builders Warranty Insurance will serve as a very lucrative ‘under the table’ tax on the Victorian Building Industry.  

Your support of this tax is a message that will go direct to your constituents unless you specifically respond and put your position in writing to us.

The time for playing party political games with this issue is over – the industry and the community are hurting and it is time the policy makers in your party were held to account.

The options are simple you can adopt a first resort model based on the self funding proven principles of the holistic Queensland model or take the Tasmanian path of no insurance and when removed two years ago saw the Tasmanian industry forge ahead by a massive 17.5% compared to the rest of the nation that has remained static or withdrew according to ABS figures.