My Builder is building my home, he has Warranty Insurance as a home owner why do I need Latent Defects Insurance?

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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.

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