Here are answers to questions builders and tradespeople have been asking about the home building compensation reforms.
Nothing has changed for builders just yet, so you can continue to:
- go through your broker to get eligibility assessments and certificates of insurance
- visit the icare website for information at www.icare.nsw.gov.au
No, icare remains the only licensed insurer in the home building compensation (HBC) market in NSW.
No, but recent law changes mean that cover can be offered as two separate contracts of insurance (split cover) by licensed private operators in the HBC market from early 2018.
Split cover will double the total cover for the homeowner to a minimum of $680,000, including:
- construction period cover, with a minimum of $340,000 for the risks of non-completion* and associated defects during construction, and
- warranty period cover, with a minimum of $340,000 for the risks of defects after completion.
If a contractor or home owner chooses split cover, they must purchase both construction and warranty period cover.
The existing minimum of $340,000 in combined cover will continue to be available as a single product for non-completion and defects within the statutory warranty period.
A number of private providers are interested in joining the scheme, but cannot apply to us (the State Insurance Regulatory Authority/SIRA) for a licence until the first quarter of 2018.
The names of any private providers licensed to offer HBC insurance in NSW will be listed on our website at www.sira.nsw.gov.au
Until then, icare remains the only provider licensed to offer HBC insurance.
We’ll publish news about HBC reforms on our website and in industry publications such as Fair Trading’s Foundations newsletter.
To stay up to date with HBC reform news, you can register for alerts by sending an email to email@example.com
We’re the regulator of the HBC scheme, so we will:
- implement the Government’s reforms to the scheme
- develop regulations and guidelines
- set minimum standards for eligibility for HBC insurance
- decide whether to approve applications from private providers wanting to enter the HBC scheme, and
- decide whether to approve premiums that licensed providers intend to change builders.
We are designing the details for how the reformed scheme will operate by seeking industry and public feedback on:
- how we should regulate builder eligibility standards and premiums
- eligibility, premium and prudential guidelines, and
- home building compensation regulations.
To register to be notified when the draft guidelines are released for feedback please email firstname.lastname@example.org
In June 2017, the NSW Parliament passed laws to reform the home building compensation scheme in NSW.
The laws will take effect early next year to create a financially sustainable scheme that’s open to private competition and product choice, with high levels of consumer protection.
If you are a builder or tradesperson, you will still:
- need to get home building compensation cover for residential building work in NSW costing more than $20,000, such as new home constructions (including multi-unit buildings of three storeys or less) or home renovations
- be able to use a broker to access these products, and
- need to give a certificate of insurance to the homeowner before starting work or accepting any money, including a deposit.
Failing to have cover will continue to be an offence under NSW law.
icare hbcf will continue to offer insurance.