Assetinsure Warns of Potential Impacts from Victoria's Building Insurance Reforms

Mark Sinfield, Head of Construction Warranty Insurance at Assetinsure, criticized the bill for potentially transforming routine complaints into complex bureaucratic procedures. He emphasized that the shift to a first-resort insurance model could lead to an influx of claims, including those of a frivolous nature, thereby escalating legal and building costs.

Drawing parallels with Queensland's existing model, Sinfield noted that average claim resolution times in Queensland extend beyond 12 months, with administrative costs nearly four times higher than those in Victoria's current system. He cautioned that adopting a similar approach could burden builders with time-consuming processes, ultimately passing increased costs onto homeowners.

Industry professionals, including Bryn McMurray, Director of Carringvale Construction Management, have echoed these concerns. McMurray highlighted that the proposed legislation fails to address critical issues such as unlicensed trades, fraudulent building licenses, inadequate regulation, and labour shortages. He warned that the reforms might inadvertently empower unscrupulous operators, potentially driving honest builders away from the residential market.

As the Victorian Government moves forward with these reforms, it is imperative for stakeholders in the construction and insurance sectors to engage in comprehensive consultations. Addressing the potential unintended consequences of the proposed changes is crucial to ensure that the reforms effectively enhance consumer protection without imposing undue burdens on the industry.