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Home Owners Latent Defects Insurance

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Latent Defects Insurance is an insurance designed to protect against the cost of complete or partial re-building or rectifying work to a new home, renovation or extension as a result of defective design, workmanship or materials that occur during the construction period but are not discovered until after completion of the building works (Final Permit).

What does Latent Defects Insurance Cover?
It protects the home owner, once the home is complete against any unforeseen structural defects that may arise within the prescribed period of 10 years.

Roof framing system trusses fail – roof sags
Load bearing foundation, slab, stumps fail – floor subsides/heaves

All affecting the structural integrity of your home.

These problems are tricky to fix, very expensive and time consuming plus the major stress and worry that it causes to you and your family – all taken away with Buildsafe Owner Builder Latent Defects Insurance.

Why it is important to have Latent Defects Insurance?

Building your New Home, Renovation or Extension is one of the biggest financial commitments under taken in life.

It is important that you insure your long term investment with Latent Defects Insurance (10 year policy) apart from the peace of mind it will protect your family from an unforeseen catastrophic structural failure causing untold financial and personal strain on the family unit.

Benefits of the Home Owners Latent Defects Cover:

It provides you, the home owner cover in the event your home suffers damage to the Structural Elements of the premises caused by a defect in design, workmanship or materials. Latent Defects Insurance will rectify the structural defect and damage caused to the premises.

You go direct to the insurer to claim
Underwritten by Lloyds’ of London
No Delays over whose fault or who caused the problem

10 year cover
Non-Cancellable

Is my Builder insured as well?

Yes, you both are included on the policy as the insured and therefore protected in the event of a claim. So, it is in the Builders interest to fully support your efforts to obtain Latent Defect Insurance.

How do I obtain Latent Defects Insurance?

As the home owner you and / or the builder are able to purchase Latent Defects Insurance. Depending on the size of the builder, will depend on what form is to be completed. Refer to our Downloadspage.

Extra Benefits:

You only buy insurance in the chance that a claim may occur, and we understand the pain, inconvenience and general trouble it will cause you and your family, but if it does happen we are here to not only fix the problem but offer you alternate accommodation if needed, demolish and take away the rubbish, pay for the professional fee’s e.g. Architects, engineers etc. even bring your home up to current Building Regulation Standards*.

We look after you.

Problems to watch out for:

Watch out for the following structural defects that could affect the structural integrity of your home.

Has the roof been properly secured?
Has the slab deflected due to shrinkage, substandard workmanship excessive loading causing it to fail.

Has the roof sagged due to inadequate fitting or workmanship.
Has the floor sagged (stumps) due to inadequate framing and support, poor workmanship in the stump erection. e.g. support pier is not properly placed to support the beam.

The problem is these or any major structural Defects may happen in 3 – 4 – 8 – 10 years time, are you willing to take the risk ?

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FAQs

Got a Question about Home Owner Latent Defects Insurance? We’ve got the Answer!

Difference between Builder’s Warranty and Latent Defects Insuranc

Builders Warranty, Builder is statutory required to supply 6 year Builders Warranty to cover homeowner if Builder dies, disappears or becomes insolvent e.g. Takes deposit- disappears, defects arise and ‘fight’ occurs. There is an implied 10 Year Warranty period under the ACT.

The Builder is responsible!

Latent Defect Insurance, The Builder is the insured along with homeowner – no liability on the builder, no personal guarantees. Policy Is for 10 Years. In the event of a potential Structural Defect the insurer and NOT the builder is responsible.

How long does the Latent Defects Insurance period last

What is the difference between Structural Defects Insurance and Latent Defects Insurance?

Is Latent Defects insurance transferrable?

How much is the excess?

What is the most I can claim?

Why take out the policy before I start?

Who is the insurer?

Who is responsible for fixing the Structural Defects if they arise?

What can I insure?

Who can take out the policy?

Can I make a claim during construction?

Can I be sued under the policy?

How long would it take to fix the defect?

What is the difference between Owner Builder Latent Defects Insurance and Owner Builder Warranty Insurance?

Owner Builders Latent Defects Insurance protects the Owner Builder while they are living in the home they have built, for structural defects for up to 10 years after completion.

It is transferrable for the 10 year period and in the event of a Structural Defect occurring, the insurer, Lloyds of London has the option of taking action against the person(s) responsible, not you the Owner Builder, you are the Insured. Once accepted, the Insurer will fix the Structural Defect and you are not involved in legal litigation, hassles and cost.

Owner Builder Warranty is a statutory requirement if the Owner Builder sells, it is for the benefit of the purchaser if the owner builder dies, disappears or becomes insolvent in the event of a claimable event. It is a statutory requirement and you the Owner Builder are responsible to fix any non-structural defects (2 years) and Structural Defects (6 Years) of the home bought by the purchaser. It is mandatory in Victoria and Western Australia.

N.B. There is an implied 10 years warranty period. So even though Warranty Insurance has a 6 year period, you are on risk for 10 years and if a structural defects occurred in year 9, then you are required to fix the problem.

I won’t need this, I know my tradies.

How much will it cost?

What is the technical inspection report?

Am I responsible to fix the defects once the Policy starts?

Is there a maintenance period?

Is there a 10 year implied warranty for defects?

Can I buy Latent Defects Insurance after I have finished building?

Difference between Construction and Public Liability and Latent Defect Insurance

It will be a new building, why do I need Latent Defect Insurance?