QBE Insurance has been forced to withdraw building indemnity insurance from July after a rise in the number of builders becoming insolvent. Legislation in many states requires home builders to hold indemnity insurance to protect the property owner in the event the builder collapses, disappears or the builder passes away.
A QBE spokesperson said “QBE has reassessed its participation and we consider it no longer viable as significant increases in premiums would be required.”
Lobby group, Master Builders Australia says the industry is facing a crisis not seen since the collapse of HIH.
The Australian reports, “The South Australian Labor government said it would not let the market collapse, with options now being considered to cover the shortfall.”
With the market expected to further deteriorate, it is unlikely any insurer will touch the sector forcing the South Australian state government to pick up the pieces at the expense of the taxpayer.
» QBE pullout tipped to spark building crisis – The Australian, 15th March 2013.
» QBE Insurance to withdraw from building indemnity insurance market in South Australia due to too many builder insolvencies – Adelaide Now, 15th March 2013.
» ‘No better time’ to flog a dead horse – Who Crashed The Economy, 20th October 2012.
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