Dodgy building products could cause higher premiums, non-coverage - ICA

Insurers are calling for a national building quality watchdog to stop developers from using substandard building products

Dodgy building products could cause higher premiums, non-coverage - ICA

Insurance News

By Mina Martin

An industry peak body has warned that insurance premiums will significantly rise unless governments do something about developers using cheaper, substandard building materials.

To address the issue, insurance companies are calling for a national building quality watchdog with the power to enter building sites and check for banned building materials.

In a Senate inquiry in the wake of London's Grenfell Tower fire, the Insurance Council of Australia (ICA) claimed that the current system where builders are allowed to choose and pay a private certifier to sign off on building safety is potentially dangerous, The Daily Telegraph reported.

“There should be an independent specification and plan review process, including an inspection regime scheduled to coincide with critical stages of construction development,” the industry body said in a submission to the Senate inquiry.

“These regimes should conclude in a final certification process that precludes any potential for noncompliance and product substitution.”

The council said that while the independent checks could add to building costs, it “will ultimately save lives and costly rectifications where noncompliance is only detected in a building some time after occupation has commenced,” the report said.

Already, thousands of Australian homeowners face house fire risk due to the installation of 4313km of faulty Infinity electrical cables, which were recalled in 2013, but only half of which have been removed.

Furthermore, flammable aluminium composite cladding – the same material blamed for the Grenfell fire, which caused 80 deaths – are contained in thousands of high-rise buildings across the country. Illegal asbestos has also been found in Chinese-made building materials, the publication said.

ICA wants a national inspection system to be based on Queensland, where the Building Construction Commission has the authority to enter and inspect building sites and take samples of products for testing.

According to ICA spokesman Campbell Fuller, insurers might increase premiums or refuse to cover buildings that have non-compliant materials.

“Non-compliance (with building laws) can put lives at risk as well as affect the insurance of the building,” Fuller said.


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