Latest changes to HBCF | Home Building Compensation Fund (HBCF) | Master Builders Insurance Brokers (MBIB) | Homeowners Insurance | Home Warranty Insurance New South Wales
Latest changes to HBCF reforms.
The HBCF Eligibility Review Process is changing for small and system reviewed small builders.
Here's what might affect you:
icare has confirmed that they will be implementing a new auto-assessment tool which is expected to go-live in April 2022.
HBCF conducted an internal review in response to the detailed recommendations in the most recent reports from IPART and icare’s customer advocate. Through this process, HBCF have determined that the most efficient and accurate way of assessing small and system reviewed builders for eligibility is based on an analysis of various risk characteristics rather than a full financial review.
icare have developed a bespoke algorithm that will automatically generate an Eligibility Score for each builder and this score will determine the Open Job Value a builder is offered.
There will be three new categories of builder:
- New Builders will be granted a maximum of $1m in eligibility and will need to participate in the Building Contract Review Program (BCRP) to be eligible for an increase in eligibility.
- Tier 1 Builders (builders seeking less than $3m in Open Job Values) that undergo the process would be offered automated eligibility of $1m, $2m or $3m depending on their Eligibility Score.
- Tier 2 Builders (builders seeking between $3m and $5m in Open Job Values) that undergo the process would be offered automated eligibility of $3m, $4m or $5m. Noting, Tier 2 builders who do not utilise the $3m+ across 3 years will be moved to Tier 1.
For each category of builder above, there will be no cap on the open job number.
icare have published preliminary FAQs to provide further detail on the changes, available here.
icare are still developing the final details of the model and MBIB will provide further updates as they become available.
Changes to Construction Categories for all builders.
The State Insurance Regulatory Authority (‘SIRA’) have advised that they have made changes to construction categories.
It is expected that icare will implement the new construction categories in April 2022. See SIRA update for more details.
The biggest changes are:
- The number of construction categories will be reduced to five (currently nine) based on whether work is on a Class 1a building or Class 2 building, and whether work is to build new homes, or work on existing homes, or work relating to a swimming pool.
- New Dwelling Construction: existing categories C01 & C09 will be combined.
- Land titles will no longer affect the classification of C09 projects.
- Building Work to an Existing Dwelling: single dwelling alterations and additions, combining the existing categories of C04 & C06.
- Building Work to an Existing Residential Apartment Building: multi-unit alterations and additions, combining the existing categories of C02 & C08.
Meanwhile, SIRA have also proposed pricing changes off the back of the IPART review that will be effective in April – click here for more detail.
As your existing HBCF broker, our dedicated specialist team will continue to proactively support your ongoing eligibility limit management and certificate issuing needs.
What do you need to do?
If you have valid eligibility with us, you don’t need to do anything.
If your circumstances have changed or you have any questions, please contact us.
For more information, talk to our specialist team:
Ph: 1800 150 888