News
HOME WARRANTY INSURANCE
Wed, 10 Feb 2010Vero has announced its decision to withdraw from the national builders warranty market with effect from 1 July 2010.
Following on from Vero’s announcement on Friday afternoon, we would like to provide Wesbuilders members with a further update on where we see the Home Warranty insurance (HWI) market at the moment.
1. QBE are yet to make a formal announcement on their position moving forward.
2. Vero are still writing business until 30 June 2010 so there is no need to panic.
3. There are meetings being held this week between key stakeholders and the government.
4. The key questions at the moment are:
* Will QBE continue writing HWI?
1. Hopefully, but a decision has not been made yet
* Will the WA state government decide to underwrite the business as the NSW government has?
1. There has not been any indication from Troy Buswell yet.
* When are we likely to see an outcome?
1. Talks are continuing and the matter is being treated as a priority by all stakeholders so hopefully we will have some direction over the next week or two.
* What affect will this have on a builder’s ability to obtain HWI?
1. Builders will be able to obtain HWI, the main question is; will it be underwritten by insurers or the government? As it is a compulsory insurance and with all the incentives put into the industry by the government they could not afford for the industry to have a repeat of the HIH debacle.
* What affect will this have on prices and underwriting criteria?
1. Prices will increase and underwriting criteria will be stricter.
Unfortunately, until the meetings between the key stakeholders are held over the next week or so, we cannot give you definitive answers. There are two outcomes that would be acceptable:
1. QBE announce that they are staying in the market and they obtain the necessary capacity and resources to support the industry appropriately.
2. The State Government announce that they will underwrite the market and QBE and/or Vero provide the administration.
The most important question is; “what should I do now?”
IF YOU ARE AN EXISTING QBE CLIENT
1. Make sure you have you have your accountant prepared Profit & Loss Statement and Balance Sheet completed and on hand.
2. Try and get your 31/12/09 interim financials ready as soon as possible.
3. Have your balance sheet looking as healthy as possible.4. Request your certificates as early as possible just in case there are delays.
IF YOU ARE A VERO CLIENT
1. Do not panic. Vero will still be issuing certificates for another five months.
2. If you would like QBE to provide a quote we recommend providing a comprehensive submission which should include as much of the following information as possible.
Required:
1. Home Warranty Questionnaire (attached).
2. Personal assets and liability statement (attached).
3. Request realistic limits; both turnover and limits per contract.
4. Accountant prepared Profit & Loss Statement and Balance Sheet for the period ending 30/6/09.
5. Website address.
If possible:
1. Interim Profit & Loss Statement and Balance Sheet for the period ending 31/12/09.
2. Work in progress report.
3. List of future work including values and approximate start dates.
4. Copy of council rates for properties listed in company financials and personal assets and liability statement.
5. CV for Directors including all experience in the building industry and experience building houses to the value requested.
6. Business plan – if possible.
7. Any other relevant information that helps explain your business.
We need to make sure that our applications are presentable and comprehensive in order to achieve the desired outcome.
Please contact the undersigned if you would like to discuss.
Thank-you.
Regards,
Darren Thompson
Managing Director
Cambridge Insurance Brokers Pty Ltd
Suite 6, 1924 Beach Road Malaga WA 6090
PO Box 2650 Malaga WA 6944
P: (08) 9248 7944
F: (08) 9248 1344
M: 0409 773 799
@: darren@cambridgeins.com.au
ABN: 33 091 640 452
AFSL No. 232602