Yes, your builder is required to supply you Builder’s Warranty Insurance which activates only IF the builder, dies disappears or becomes insolvent and is only available for 6 years from completion.
So if in the 10 years after the builder has completed your home a structural defect appears
Eg – Waterproofing failure, causing floor and timber rot and warping
– Roof, not adequately framed and sags under its own weight.
– Plumbing leak causing rotted causing rotted joists and sub-flooring
– Leaking roof causing damage to walls and rafters that support the roof
Then, if he has not died, disappeared or gone insolvent and it is before the 6 years completion date- YOU to chase the builder.
Home Owners are waiting for more than 3 years for their disagreements with builders to be resolved. Some have lost between $100,000 and $200,000 in legal fees and building costs.
Latent Defects Insurance is here for owner builders in the event that a structural defect occurs in the future that makes your house unsafe and unliveable. E.g. Plumber cuts the floor joists to fit a pipe or the electrician cuts into the stud walls, severely weakening the structure and you would not even know!
This is a 10 Year policy, with the insurer (Lloyds of London) not you, fixing the problem.
Benefits of Latent Defect Insurance to you
· 10-year non-cancellable policy.
· Transferrable to future owners.
· Owner, developer, builder protected.
· Insurer (Lloyds) fixes the defect.
· No delays over remedial work.
· No delays over whose fault.
· No doubt about Lloyds ability to pay.
· Asset protection.
· Avoid delays due to litigation.
· Increase Asset value by having insurance protection.
· Where rights of recovery exist, it is at the insurers expense not the Owner or Builder.
If the builder had put in place an LDI policy and a structural defect occurred, the insurer would have fixed the problem and taken action against who was responsible.
So before your builder starts the project – organize to put Latent Defects Insurance in place by calling AOBIS.
P.S Are you Renovating? Has your Builder insured your existing home, generally they only insure the renovation/extension. Leaving you uninsured. Contact AOBIS whose Renovators Home and Contents policy will cover your home.