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Home Owners Warranty Insurance and things you should know

  • Home warranty insurance is a vital component of a comprehensive consumer protection regime for homeowners undertaking building work in NSW.
  • Home warranty insurance provides a safety net for homeowners for residential building projects where the contract price exceeds $20,000 and a builder is unable or unwilling to honour their fundamental responsibilities under the building contract, that is, to complete the construction of a dwelling or return and rectify defective work.
  • If a builder is unable to honour their commitments under a contract because of insolvency, death or disappearance, the home warranty insurance scheme is there to protect homeowners.
  • The scheme is also there to protect homeowners where a builder refuses to meet their contractual obligations and has been found at fault by the Consumer, Trader and Tenancy Tribunal or a court and fails to comply with a compensation (money) order in favour of the homeowner (which results in the automatic suspension of the builder’s licence).
  • The homeowner is not required to enforce the Tribunal order or initiate insolvency proceedings… they are able to claim on their home warranty policy.

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