Insurance Business New Zealand – 9 July 2014
A recent entrant to the market here hopes a new 10 year warranty product will prevent crises such as the leaky building problems that have blighted the New Zealand building industry from happening again.
Ex-pat Brit Duncan Colebrook of Stamford Insurance has the sole rights in New Zealand to the new Lloyd’s-backed product which can cover single residential homes, apartments, and commercial buildings, including re-clads of leaky homes.
“It is high time homeowners could obtain a guarantee backed by an ‘A’ rated insurer of international standing,” says Colebrook. “We saw a gap in the market and persuaded Lloyd’s to give us coverholder status here”.
He said previous policy offerings were seriously flawed: “Whilst many builders offer their own guarantee or provide a third party guarantee from someone like Master Build, the leaky building situation has shown that much broader and more secure cover is needed for current and future homeowners.”
Colebrook says the product was based on a UK model and tweaked to suit New Zealand specifications.
“We’re having to be more flexible regarding the types of products and materials used, and design in New Zealand is quite different from the UK. We cover defects arising from faults and design or specification so we had to pay close attention to new design concepts that are common here that don’t apply to the UK and incorporate them into the underwriting thoughts and process. It’s quite possible that the leaky building problems could have been avoided if this had been brought in sooner,” he added.
The warranty is transferrable to new owners if a property is sold on within the 10 year policy term and approved builders will have the option to seek indemnity from any claims made against them after two years giving additional protection not currently available in the market.
Colebrook, who is part of the Insurance Advisernet network, hopes to tap into the group to make the product available around the country.
“We are hoping this product will help revolutionise the way buildings are guaranteed in New Zealand for future generations and remove the need for government intervention.”
by Maryvonne Gray