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The state government of Western Australia has approved the changes to the Home Indemnity Insurance (HII) scheme, which will provide better protections for homeowners.
Under the changes, the maximum payouts to eligible homeowners are doubled: $40,000 for lost deposits and $200,000 for incomplete or defective works.
The changes are expected to take effect “as soon as possible”, according to the state government’s statement.
Homeowners can claim these payouts if the builder dies, disappears, or becomes insolvent.
State Commerce Minister Roger Cook said this move is part of the government’s commitment to assisting Western Australians who are building their home and to protecting their investment.
"The changes to home indemnity insurance reflect current market values and challenges — we want to ensure that if a builder becomes insolvent, families are better protected and can finish their dream home,” he said.
"Improved home indemnity insurance coverage will give prospective home buyers the peace of mind and the confidence to build, knowing that if things do go wrong there will be a much better safety net."
As mandated under the Home Building Contracts Act 1991, a builder must take out HII in the owner's name before accepting payment or commencing work for residential building projects valued at $20,000 or more.
The insurance policy must typically cover the construction period and six years from the practical completion date.
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Photo by Kindel Media from Pexels.
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