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South Australian consumers will be better protected in the event of homes not being completed as the state government brings in new maximum insurance payouts.
The South Australian government has announced a major increase to insurance payouts in the event of builders leaving homes unfinished, with consumers to receive $100,000 in excess of the current amount.
The announcement comes following a joint review into Building Indemnity Insurance by the Treasurer and Minister for Consumer and Business Affairs.
The review was carried out with the focus of enhancing protection for consumers and support for the building industry.
From 1 October, the policy limit for QBE Insurance Group policies, which represents the majority of the South Australian market, will increase from $150,000 to $250,000.
The update means that home builders will receive a payout of up to 66 per cent more if their home is not completed.
The government said the $100,000 insurance payout increase is to keep pace with the higher building industry costs.
The average premium for a new build or renovation valued between $500,000 to $750,000 will also be lifted from $2,251 to $2,814, a difference of $563 or 0.1 per cent of the value of the build.
According to the government, requirements will be updated to make it mandatory for all insurers to provide the increased cover, offering better protection for home builders and renovators.
Building Indemnity Insurance is designed to protect home owners against losses when a property is unable to be completed, or in the case of defective works.
This may occur when a builder dies, disappears, or becomes insolvent.
Last financial year, the South Australian government supplied $18.7 million to aid consumers with home builds and renovations.
The insolvency of Qattro Built in September 2023 was responsible for the highest number of claims, with 251 claims to date.
There are currently more than 100 insurance claims lodged relating to the collapse of numerous businesses in the past 12 months.
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