What insurance do I need to ask for from my new home builder?
Is insurance the builders responsibility? Why do I need to ask for certificates?
The first thing to remember is: insurance is taken out for YOU, not your builder. To protect your build, you need to proactively ensure you have protection in case your builder abandons the project, becomes insolvent, or disappears. Finding out that you haven’t asked for the right evidence of insurance can cost you thousands in abandonment costs and time to engage a new builder.
Ask for these certificates before making any deposit payments on your new build:
These are the insurance policies that protect your new home build (specified in your Building contract):
Domestic building insurance (DBI). This provides cover for incomplete or defective works. If your builder becomes insolvent or unable to complete the work, DBI insurance covers fixing structural defects for six years and non-structural defects for two years beyond completion of the project.
Contract works insurance (CWI) covers loss or damage to the building work during construction. It finishes at the end of the project, unlike DBI. The cover amount for CWI is the contract value plus 15%.
Public liability insurance provides cover for personal injuries or death on the construction site. The cover should be not less than $5 million for one claim.
Here's what to ask your builder:
Ask for the policy and certificate for each insurance policy before paying the deposit on your new home build.
What happens if my builder won't share the insurance certificates?
Under all standard contracts in Australia, your builder must have all three insurance policies in place before requesting a deposit. It's essential to sight these certificates because if anything goes wrong during your build, you don't want to find out you had inadequate protection in place.
Remember the golden rule: protect your family's investment in your new home build. Make sure you're protecting yourself before worst-case scenarios happen.
How to make Building a New Home Less Complicated
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My services specialise in making the complicated simple by teaching first time home builders about what’s in their building contract before they sign.
Building Contract reviews for New Home Builds & Renovations
If you're looking for a personalised review of your Building Contract at a reasonable price, you can find out more information about my Building Contract Health Checks here.
I support clients with their HIA and Master Builders Home Building contracts from all states in Australia, including Victoria, ACT, Queensland, New South Wales, Tasmania, WA, and the Northern Territory.
Building Contract reviews are for people who want to understand their contract better before they sign.
If you're a person like me who wants to dive into the details, wants education on what makes a good contract, and what to look out for - then you're a great match for a Building Contract Review with me.
Ultimately, I want you to walk away from our session with confidence to proceed with signing your contract.
We go through any of your questions like how to avoid delays, what to watch out for and how to keep costs within your original building quote.
Thanks for reading and catch you on my next post :)
Annelyse
Construction Management | M. Construction Law
