SIRA amends NSW home building insurance scheme

SIRA amends NSW home building insurance scheme | Insurance Business Australia

SIRA amends NSW home building insurance scheme

The State Insurance Regulatory Authority (SIRA) seeks industry feedback as it reforms the New South Wales (NSW) home building compensation insurance scheme.

With increasing pressure in the housing construction market, the reforms aim to support homeowners better and reduce regulatory burdens and costs. Key proposals 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 requiring insurance;
  • Changes to work types that might be exempt from insurance, such as high-rise residential buildings; and
  • Recovering costs from businesses and culpable directors that fail to insure work.

SIRA encourages homeowners, builders, and stakeholders to provide feedback on the proposed changes to redesign the scheme. The public consultation is open until Tuesday, August 16, 2022.

Read more: SIRA to implement new publishing policy for NSW insurance schemes

Businesses in the residential building industry must have home building compensation insurance for each project over $20,000 as a principal contractor. Project types that usually require insurance are houses or low-rise buildings up to three storeys high, backyard swimming pools, and renovations or additions to existing residential buildings with any number of storeys.

SIRA explained that insurance is required to help homeowners if the business cannot complete work on their home or honour statutory warranties due to insolvency, death, disappearance, or license suspension for failing to comply with a court or tribunal order to compensate the homeowner.

Redesigning the NSW home building compensation insurance scheme follows SIRA's decision to amend workers' compensation surgeon fees and implement a new publishing policy.