Home Indemnity insurance reform passed in WA, with greater protections for homeowners

The WA Government has announced reforms to the state’s home indemnity insurance scheme, which aims to provide greater protections to homeowners.

The reforms will see homeowners entitled to up to $40,000 for lost deposits, a double of the premium maximum insurance pay-out of $20,000.  

In addition, in the event where a builder dies, disappears or becomes insolvent, homeowners will be entitled to up to $200,000 for incomplete or defective works. 

The changes aim to provide homeowners greater peace of mind and confidence when building their home, with the increased maximum amounts for pay outs also reflecting current market values. 

Under the Home Building Contracts Act 1991, home indemnity insurance is a compulsory coverage that builders are required to take out in the owner’s name, before they can accept payment or commence work for any residential building projects valued at more than $20,000. 

In most cases, the insurance policy must cover the construction period and six years from the practical completion date. 

 The reforms are expected to come into effect as soon as possible.