HBCF is simplifying construction types
icare's Home Building Compensation Fund (HBCF) is simplifying the way premiums are calculated by reducing the number of construction type categories from nine down to five, beginning 1 October 2022.
The change follows new requirements outlined by the State Insurance Regulatory Agency (SIRA) and brings icare HBCF into line with the updated SIRA Guidelines for managing Home Building Compensation insurance premiums and eligibility. These guidelines are based on the recommendations of the Independent Pricing and Regulatory Tribunal (IPART) review of the scheme.
icare's Group Executive, Insurance for NSW & HBCF, Rashi Bansal, said the changes will make the pricing process more transparent for builders and homeowners and will empower homeowners to be more aware of the product they are covered under.
"Reducing the number of construction type categories will improve how premiums are regulated for different types of construction projects, allowing a more even distribution of the risks and costs. This will result in a fairer allocation of premiums for insuring different types of work and help standardise descriptions of construction types that are understandable and practical for users," she said.
"We are merging the structural and non-structural categories and we will stop using land title as a basis for classifying construction type. This will make project applications easier to complete and lodge," she said.
"Net pricing across the HBCF scheme will also be rendered more stable, which will assist with keeping the scheme financially sustainable so it can continue to protect homeowners into the future," she added.
The construction type changes will take effect from 1 October 2022.
More information on construction types and new premium rates
