1. What is home warranty insurance?

Home warranty insurance provides protection for consumers of residential building services and subsequent purchasers. It provides cover against financial loss caused by the builder’s failure to rectify or compensate the home owner for the builder’s defective or incomplete works.

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2. Who was required to take out Home Warranty Insurance with HIH or FAI?

From 1 May 1996, builders were unable to legally build residential properties, where the value of the works exceeded $5,000, without obtaining Home Warranty Insurance. Both HIH and FAI were insurers (among others, such as Dexta Corporation, Royal and Sun Alliance etc) that offered this type of insurance. This insurance was purchased by the builder, for the benefit of their clients (ie. home owners) as well as for subsequent owners of the property, who received a warranty on the works performed by the builder.

HIH and FAI both offered home warranty insurance up to 15 March 2001, being the date that HIH was placed into provisional liquidation.

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3. What is a certificate of insurance?

This is a copy of the original home warranty insurance policy, provided by the builder to the original home owner. Many of these policies were actually issued by agents of HIH and may contain their business name and logo at the top of the certificate. You should check the body of the document to confirm that the insurer was either FAI or HIH.

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4. Where can I get a copy of my insurance certificate?

Copies can be obtained from your local council or from the private surveyor that issued the Building Permit for your property. If you signed a construction contract with the builder and applied for a loan through a bank, they should also hold a copy of your certificate. If you have a contract of sale, then under section 32 you should have been supplied with your certificate.

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5. Does VMIA BWP hold copies of insurance certificates?

No. VMIA BWP does not possess the original HIH insurance documents. Accordingly, you will need to locate the certificate prior to making enquiries of VMIA BWP.

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6. I don't know who my builder was insured with. What can I do?

Try to locate your insurance certificate, this will tell you the builder's insurer. Refer to questions 3 and 4 above.

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7. I have discovered defects in my house. What do I do now?

The first step is try to contact your builder. If the builder is not contactable, then try to locate your insurance certificate (refer to questions 3 and 4 above). If this is as described in 2 above, contact VMIA BWP. If not, you will need to contact the relevant insurer and request a claim form. Unfortunately, VMIA BWP cannot help in this regard.

You should not attempt or arrange for the undertaking of any repairs to defective or incomplete works prior to an assessment being made by the VMIA BWP of your claim. Any such repair work is at your discretion and risk.

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8. Will VMIA BWP comply with all the terms of HIH insurance policies and is the full extent of the policy coverage available?

In most cases, VMIA BWP stands in the shoes of the former HIH in relation to Home Warranty Insurance policies issued by HIH. However, claims are assessed in accordance with legislation and under the conditions of the policy. Accordingly, there are circumstances where legislation has altered the assessment of claims under the policy and VMIA BWP does not stand exactly in the shoes of HIH. For example, where a right to indemnity for the home owner arises under an HIH policy of insurance by virtue of HIH’s failure to assess the claim within 90 days. This liability is not imposed upon VMIA BWP, although VMIA BWP will assess the claim on its own merits.

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9. Do we need to fill out an VMIA BWP claim form?

Yes, the Act requires that you complete an VMIA BWP claim form. However, if you previously submitted a claim to HIH (or its Agents) with all necessary information, you will still need to submit a new claim form to VMIA BWP. However, you should advise VMIA BWP of your earlier claim with HIH as it is possible that VMIA BWP may be able to gain possession of the original claim file. If so, it will assist in processing.

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10. How do we obtain a claim form?

Download the claim form from this website.

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11. What are the reasons my claim could be rejected?

Claims can be rejected for a number of reasons. Such reasons include, but are not limited to:

• Your insurance could have expired.
• The builder may have continued to insure through a different company.
• No defects were apparent by the assessor.
• The amount of the claim may not exceed the excess applicable.
• The limit of indemnity has been exhausted.

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12. What can I do if my claim is rejected in whole or in part?

You have the right to appeal the decision to the Victorian Civil and Administrative Tribunal (VCAT). Any appeal must be lodged within 28 days of the receipt of VMIA BWP’s assessment of your claim. Please note that the maximum amount payable by VMIA BWP on any claim is $100,000. On a claim for incomplete works you may be entitled to 20% of the original contract price up to a maximum of $100,000, inclusive of any indemnity for defective work.

Please note that the builder is also entitled to appeal the VMIA BWP’s decision in the same manner if the builder is dissatisfied with the acceptance of the claim or the quantum of the assessment.

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13. HIH previously paid out part of our claim form, but rejected certain items. Can we claim the rejected items again?

No. If HIH validly rejected certain items, VMIA BWP is bound by that decision.

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14. Our builder is in liquidation. Do we still have any insurance?

Yes, provided that:

• A HIH policy was issued on your property and has not expired; and
• Provided that the dollar value of the indemnity on the HIH policy has not been fully exhausted by other claims made under the policy.

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15. We have purchased an existing house and a defect has developed. Can we make a claim?

Yes, you are a successor in title and can make a claim provided that:

• A HIH policy was issued on your property and has not expired; and
• Provided that the dollar value of the indemnity limit on the HIH policy has not been fully exhausted by other claims made under the policy.

Your claim will be assessed in accordance with the legislation and under the conditions contained in the original insurance policy.

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16. We wish to sell our home that was previously covered under HIH. What do we have to do?

Nothing. Legislation deems that the requirements of Section 32 of the Sale of Land Act are covered if a HIH policy was in force at the same time as the sale. Should a claim arise in the future, VMIA BWP will handle it. Please do not contact VMIA BWP.

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17. We want to lodge a Common Property defects claim. What do we do?

For defects that fall under the common property area in an apartment building, for example, a claim form has to be completed by each individual unit owner as well as by a member of the Body Corporate. The reason for this is that there is a $100,000.00 maximum claimable limit for each unit. If any monies are to be paid out, a percentage would be taken from each unit owners limit. We therefore require authorisation from the owners of each unit to do this.

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