This article is from the Australian Property Journal archive
EXCLUSIVE: IT was revealed in Tasmanian Parliament yesterday that the Housing Industry Association collects a cool $15 million per annum from builders warranty insurance that has been described as a total ‘mockery’ of consumer protection.
In his notice of motion before the Tasmanian Parliament, Greens MHA for Bass, Kim Booth revealed that consumers have lost $1.75 billion on warranty insurance that he described as a “worthless product”.
“The current scheme is a statutory fraud,” Booth declared.
“Industry associations, in particular, the Housing Industry Association directly profit from this statutory fraud.”
Booth revealed documents before Parliament that showed a current HIA Insurance Services Pty Ltd Directors Report with financial accounting to December 31 last year showing that the HIA had received some $15 million in accordance with its agreements with insurance companies.
Booth said that the supposedly privately owned HIA Insurance Services Pty Ltd has five current HIA directors on its board.
Booth told Australian Property Journal last night that the motion went unchallenged and was accepted by the House.
Recently, a West Australian judge gave the opinion that the legality of warranty insurance may well be a ‘triable issue’.
Justice Eaton believes the warranty and indemnity process “could be illegal and unenforceable”.
The judge’s opinion potentially paves the way for class actions against warranty insurance companies, as well as the HIA and State governments who have forced consumers into buying the worthless policies.
“This ‘last resort’ clause isn’t only unexpected and confusing for consumers, it makes a mockery of consumer protection, leaving you without insurance cover when the builder is still around but has failed to work to standard or complete the project,” CHOICE magazine said in its damning report on builders warranty insurance.
“While you (through the builder) have to pay for this compulsory insurance, in most states you can’t just make a claim when something goes wrong,” CHOICE declared.
“The insurance only kicks in when the builder has died, disappeared or become insolvent.”
Amazingly, State governments including the Bracks government in Victoria and the Iemma in NSW, have forced consumers to buy the ‘worthless’ insurance policies through legislation.
Longtime lobbyist against builders warranty insurance, Phil Dwyer last night told Australian Property Journal that it is finally time for the governments to act and do the right thing by consumers and scrap the ‘last resort’ insurance.
Currently, a HIA executive is pursuing Dwyer for alleged defamation in the Supreme Court of the ACT whilst HIA chief executive Ron Silberberg has action in the Federal Court against Dwyer’s Builders Collective website for a third party blog posting that is alleged to be racially motivated.
Dwyer admitted to Australian Property Journal last night that his long running campaign and the recent court action against him has all but sent him to the wall.
Australian Property Journal
