Redesigning NSW’s home building compensation insurance scheme
5 July 2022
Consultation is now open on proposed reforms to the NSW home building compensation insurance scheme.
The proposed reforms are aimed at better supporting homeowners and reducing regulatory burdens and costs.
With increasing pressure in the housing construction market, some of the reform ideas would expand aspects of the scheme to provide greater coverage to homeowners.
Other reform ideas would narrow the scheme to reduce the cost of building work on homes.
The consultation also considers who should provide cover in the scheme and how they should be regulated.
Key proposals for consideration include:
- Changing the amount of insurance cover offered by the scheme.
- Extending cover to victims of unlawfully uninsured home construction.
- Allowing claims earlier in the dispute process.
- Updating the value of building work for which insurance is required.
- Changes to the types of work that may be exempt from insurance, such as in high rise residential buildings.
- Recovering costs from businesses and culpable directors that fail to insure work.
Homeowners, builders, and anyone with a stake in the home building compensation scheme is encouraged to have their say on proposed reforms to redesign the scheme.
The public consultation is open until Tuesday 16 August 2022.
About the Home building compensation scheme
Businesses in the residential building industry must buy home building compensation insurance for each project they do over $20,000 as a principal contractor.
Types of projects that typically require insurance are the construction of a house or low-rise apartment building up to three storeys high, backyard swimming pools, and renovations or additions to existing residential buildings of any number of storeys.
The insurance helps homeowners if the business cannot complete work on their home or honour statutory warranties due to insolvency, death, disappearance, or licence suspension for failing to comply with a court or tribunal order to compensate the homeowner.