New Home Warranty Insurance Threshold

We have received notification regarding a change to the NSW Home Warranty Insurance threshold.

The new NSW Home Warranty threshold will be $20,000. This means that if you enter into a contract for an amount benlow $20,000; Home Warranty insurance will not be required.

The new Home Warranty threshold will of $20,000 is effective as of 1st February 2012.

If you enter into a contrat prior to this date, you will still need to obtain Home Warranty insurance - if the contract is greater than $12,000.

For further information please contact one of our SHC Consultants on 1300 730 073.

FIAA Home Warranty Scheme Update

Your Renewal Assessments

Did you know that you may be exempt from renewal assessments if you meet the following criteria:

• You currently hold eligibility
• Your turnover is less than $1m
• You do not carry out any structural contracts below $30k

If you have been asked to renew your eligibility, find out if you qualify for exemption by contacting one of our Home Warranty specialists today on: 1300 550 665.

Price Rises

By now, you should have been notified about the price rises across the scheme. We’d also like to advise you of a change to the Home Warranty application fee charged by your insurer, Winsure.

The total cost of processing a Home Warranty certificate has increased by $16.50. Winsure, has applied this increase to cover the high cost of administrating certificates under the FIAA Scheme. Unfortunately, this increase is out of our control.

Going forward, please include this increase in your job costing. If you need help calculating your Home Warranty premiums, please visit the NSW Home Warranty Premium Calculator tool.

Another important development is the need to provide full financial information to the administrator of the scheme, whereas previously the eligibility process was a relatively quick and simple.

You will need to be aware of your turnover limits within the SHC online system and be prepared to provide the following information:

• Financials prepared by an accountant for the last two years.
• Companies are also required to submit interim accounts which must be no older than 3 months. These can be your internal accounts i.e. from MYOB, but the documents must be signed off by all Directors.

Any personal assets declared in the ‘Statement of Assets and Liabilities’, need to be supported by proof of ownership documentation including; property rates notices and 3 months of bank statements for any cash assets.

We have also been liaising with the administrator of the scheme trying to overturn the requirement that project certificate completions cannot drop off the system for 12 months. Whilst we have had limited success to date, recently over 3,000 small warranty facility clients have received turnover lifts to alleviate this issue.

We are also noticing turnover times from the administrator of the scheme are in excess of 10 working days, so it is best to be proactive if your turnover from the facility is close to being used up.

We continue to lead the market in delivering innovative online product solutions and would like to remind you of the benefits of our dedicated online Home Warranty self-issue certificate system. Our online application provides you with your Home Warranty certificates 24 / 7 and is the only one of its kind in the market.

If you need any additional information on Home Warranty eligibility or would like some help accessing our online self-issue certificate application, please call one of Home Warranty specialists today on: 1300 550 665.

New Look for
a New Era

SHC launched their ‘new look’ website in February 2011. This website now encompasses more of the products that SHC service and provide, to give our clients a greater understanding of what we can present.

We have also launched two additional websites; one dedicated to Owner Builders at: www.ownerbuilderensurance.com.au, and the second dedicated to the Trades Industry at: www.tradesensurance.com.au

Both sites feature an online application process which enables clients to purchase their insurance policies online 24/7 – a first in Australia. 

SHC wants to remain at the cutting edge of the provision of commercial insurance products to clients and remains heavily committed to further large investments in online IT.

We would greatly appreciate any feedback, so that we can improve our websites. Please go to the 'Contact' page to provide your feedback.

We'd like to take this opportunity of thanking you for visiting our website. Happy surfing...

HOME WARRANTY NEWS UPDATE 2010

NSW PRICING

The new government Insurer, the NSW Self Insurance Corporation or SICORP has released new pricing effective the 1st of October for Home Warranty project applications that can be accessed via our office through the two remaining agents, QBE and Winsure (sub agent of Calliden).

Important points:

There will be one single rating structure for all Builders, no matter how big or how small, this structure will be provided via web based rating models, one of which will be uploaded onto our website shortly.

If the current premium being paid by a Builder is below the new price, then SICORP have capped any increase to 30% a year until this new rate is achieved. If the current rate being paid is above the new rate, the Builders price will drop.

A guide to how the new rating structure applies is as follows:

The rating is separated into the following categories and will be postcode driven (guide included below)

Structural

Metro ‐ rate 0.720% inclusive of government charges eg $250,000 x 0.720% = $1800 plus any broker fee.
Regional ‐ 0.575% inclusive of government charges eg $250,000 x 0.575% = $1437.50 plus any broker fee.

Multi Units

Metro ‐ 0.108% inclusive of government charges
Regional ‐ 0.863% inclusive of government charges
eg Metro $250,000 per unit x 0.108% = $2700 plus any broker fee x number of units.

Non Structural

Metro ‐ 0.50% inclusive of government charges
Regional ‐ 0.408% inclusive of government charges

Minimum cost applying to any certificate will be $191.84 plus broker fees.

Plus note the above rates apply from the 1st of October 2010, we will be in contact prior to then confirming your individual situation.

TIPS TO MAKE TRANSITIION INTO NEW SCHEME EASY

At this stage , we are even unsure as to how SICORP or their agents will communicate your individual pricing, please take a conservative approach in pricing future projects from the 1st of October based on the above calculations until we communicate further. We are now only 6 weeks away. As the definition between Regional and Metropolitan is postcode driven, a guide is as follows.

The new SICORP rating model for reviews and new eligibilities is yet to be rolled out, we do now know it will add considerable paperwork to most reviews, please ensure you include all information requested or it may delay any review. We will have all new forms uploaded on our website in the next week, where possible, please use these forms as older documentation may not meet new standards of information required. At this stage, all Builders over $500,000 turnover will require the following information:

• Fully completed and signed Government Application Form.
• Evidence of ownership (e.g. rates notice) for all property shown in assets / liability section.
• Copy of a current licence / registration for each of the directors / partners / business proprietors or nominated supervisors.
• Financial evidence ‐ Sole Trader or Partnership. Please attach most recent Taxation Returns (not Notifications of Assessment).
• Financial evidence ‐ Company or Trust Fund. including Trading Statement, Profit & Loss sheets, Balance Sheets and notes. Financials should not be more than 12 months old.
• Copy of Trust Deed for Trust applicants.
• Copy of Franchise Agreement for Franchisee applicants.
• Additional supporting evidence or documentation required to demonstrate ability to meet capability/experience criteria (e.g. CVs, appropriate references, etc.)

When assessments are completed, there will be 2 results;

You can proceed without any further restrictions

Or

You have a inadequacy and will have to consider the following:

• Provide a limited deed of indemnity ‐ limited to the amount of shortfall in equity
• Provide paid up capital
• Consider the managed builder program ‐ Focuses more on inspections and job costings and less on financial position, the cost of this program could be $1500 on top of the cost per certificate, however provides less restrictions on growth.

We will advise you of the best option to suit your circumstances and is not too different to current underwriting philosophies you are familiar with.

In summary, timely access to your financial information is a key driver of the model going forward.

If you have any queries about the above, please contact your account broker or email us on customerservice@shcorp.com.au