NEW HOME WARRANTY INSURANCE PREMIUM RATES
EFFECTIVE 1 OCTOBER 2010
The Home Warranty Insurance Fund has announced the new premium rates to be applied to all certificates of insurance, with effect from 1 October. They are based on “Industry” and do not take into account non-structural elements except where the Works are of a non-structural nature:
- Single Dwelling premium rate: 0.60% in metropolitan areas and 0.48% for country locations.
- Non-structural premium rate: 0.42% in metropolitan areas and 0.34% for country locations
- Swimming pool projects and multi-dwelling developments premium rates: 0.90% in metropolitan areas and 0.72% for country locations.
- The premium rate for owner-builder work completed within four years of the application for insurance is 40% more than the rate for the same type and price of work undertaken by a licensed builder;
- Current premium rate discounting for volume builders will be phased out over five years;
- A minimum premium rate of $160.00 will apply to all projects; and
- The premium rate for projects with a contract price greater than $1 million will be available on application (POA).
The premium rates exclude GST, Stamp Duty and any Processing and Broker Fees that may apply.
Metropolitan areas include Greater Sydney, Central Coast and Newcastle
Impact the New Premium Rates will have on Builders
Average premiums will go down in the first year. Builders who undertake more risky activities, such as multi-unit dwellings, will attract a higher rate than less risky activities such as non-structural renovations. The majority of builders will pay a lower premium rate under the new system and most small builders will experience a rate reduction. There will be a small number of builders who will receive an increase that reflects the level of risk of their project. Builders should contact their insurance broker to discuss their specific circumstances.
Transitional arrangements have been put in place to limit the maximum increase for any builder, on a like-for-like basis, in any one year to 30% for the next five years.
Peter Freeman
Managing Director
NATIONWIDE INSURANCE BROKERS PTY LTD
AFS Licence 234535
ABN 49 067 066 371
Suite 13, 6-8 Old Castle Hill Road, Castle Hill NSW 2145
Locked Bag 12, Castle Hill NSW 1765
Phone: (02) 9634 6600
Fax: (02) 9634 6610
Email: nationwide@nationw.com.au
Web: www.nationwideinsurancebrokers.com.au
