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

In Owner Builder Latest News by Underwriter

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.