Last financial year there were 39,350 insurance policies taken out under the Home Warranty Scheme for new homes, 53 per cent more than the previous financial year. Picture: Supplied
Queensland’s construction watchdog has approved more than $190 million in insurance claims for defective and uncompleted residential housing works.
The payouts have been made under the Queensland Home Warranty Scheme, administered by the Queensland Building and Construction Commission (QBCC), over the past five years.
The scheme covers residential construction works, including renovations greater than $3,300, to provide peace and mind for residential homeowners affected by defective work or the collapse of a builder.
A Queensland Building and Construction Commission insurance scheme protects new homeowners if a builder is unable to complete a project. Picture: Dan Peled
However, it only covers new homes, townhouses and multiple unit dwellings of no more than three storeys.
By far the biggest period for approved claims for dodgy work was $47.5m during the 2017/18 financial year which included $17.4m for non-completed works.
Of the $31.3 million in approved claims during 2020/21, almost a third ($9.9m) were for the non-completion of work.
The worst year for contractors failing to finish a job was during 2018/19 when more than half of the insurance payouts were to supplement another contractor to complete a contract.
“The QBCC provides a free service to homeowners and builders caught in the ‘perfect storm’ of rising prices and material shortages,” a QBCC representative said.
“When a homeowner signs a contract with a builder they want certainty that the builder has the financial means to finish the job.
“In cases of non-completion due to insolvency, the QBCC administers the Queensland Home Warranty Scheme, which is the statutory insurance that protects homeowners.”
Last financial year there were 39,350 insurance policies taken out under the Home Warranty Scheme for new homes, 53 per cent more than the previous financial year. Picture: Stock
The insurance premium is calculated on a sliding scale, according to the value of the project, and is built into the cost of construction. A contractor must pay the premium before work begins.
Last financial year there was an explosion in new residential construction contracts, with 39,350 insurance policies taken out under the Home Warranty Scheme — 53 per cent more than the previous financial year.
Overall, there were 168,468 insurance policies issued by the QBCC during 2020/2021 compared with 128,170 the previous financial year.
Since 2016, premiums have risen about 12 per cent with the cost of a premium for a $400,000 contract for a new house at $3622.
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