How to choose the best owner builder insurance product

December 12, 2017 5:30 pm Published by 5 Comments

What separates one insurance from another lies in the quality of the insurer. Quality of an insurer is measured by reputation, experience and commitment to the clients it serves.

‘We hear it every day, when it’s time to buy insurance nothing is a problem, but when you need them, it appears everything is a problem’, says Sam Greco, Chief Executive Qamvis Insurance Group owner of insurance brands Qtrust, Qiducia Underwriters and Insure online.

Owner builders should be aware that no insurance covers everything. Simple sales consultants make it sound simple: everything is covered! No, it’s not. The detail lies deep within the insurer, and this detail lies very much with the insurers understanding of owner builders as individuals and not company’s, the insurers reputation, and experience and client commitment.

When choosing insurance, owner builders are disadvantaged because it’s what to know about the Policy cover and how technicalities apply to the actual construction project specifics. Owner builder insurance is commercial grade insurance. It’s not house and contents and not car or travel insurance, so rules, terms and conditions are very different and are governed by different laws and precedents.

Example of weak insurance:

Identifying an owner builder as the principal contractor. By definition an owner builder cannot be principal contractor because they are the owner builder by legal definition (site owner and builder);

Subcontractors are insured under the principal contractor. See point 1 above. Poor and ambiguous insurance wordings by inexperienced owner builder insurers.

Claims or policy complaints are only available under NSW law. What about the rest of Australia, after all we don’t all live in Sydney. (As a matter of fact: more owner builders reside outside of Sydney metro than in Sydney).

Commenced works exclusions and embargoes;

When renovating or adding an extension excluding Public Liability cover across the owner builder’s entire residential site;

Escalation of cost allowances interpreted as increased cost of workings;

No brand insurance companies, foreign insurers and ‘never heard of’ insurance companies have very little understanding of owner building under Australian conditions. They generally advertise broadly announcing outlandish benefits such as free house paint or free books if you purchase insurance. Nonsense. Insurance is serious.

Insurance price Vs performance equation is unlike most purchases, where better quality equals higher price. Owner builder insurance premiums works in reverse. High quality insurers understand risks in far greater detail and thereby price all elements of cover which reflect actual risk. In other words premium is a truer reflection of the actual risk an insurer faces and thereby prices accordingly.

Qtrust Insurance works hand in hand with underwriters and their key personal (Qiducia Underwriting). With tens of thousands of owner builder construction projects insured under our hand, our underwriter’s offers first class protection with best in class premiums. Qtrust guarantees best price with a unique Price Beat Guarantee.

Go visit Owner Builder Insights and Library here

Get a quote on-line now go here

Asking family and friends for a helping hand is common practice when owner building. But, like all building sites they are inherently unsafe. Accidents happen. Doing the ‘right thing’ is making sure those you love and volunteered to help out, are insured against injury, loss of wages, medical expenses and long term disablement.

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This post was written by Technical Underwriting Centre


  • Brian Shore-Ryan says:

    A courtesy note to thank you and your team for their assistance with a long standing client of our firm who had a difficultly obtaining insurance. We will recommend your firm to any client requiring owner builder construction insurance. Your professional service and advice is outstanding.. Thank you Brian

  • Vance says:

    This is really useful, thanks.

  • tim j says:

    we never thought this type of insurance would be so confusing. can you clarify why your insurance is better than the others?

    • Technical Underwriting Centre says:

      Yes Tim. The difference lies in the two most critical cornerstones of any insurance cover:
      1. Firstly, the quality of insurer or who is actually guaranteeing the Policy integrity and promising to pay your claim – after all that’s the only reason anybody takes insurance. Our firm only deals with first class Australian insurers who are independently rated as “A” class or better which means global auditors considered our Insurers financial strength and willingness to pay claims. The quote we supplied carefully details our insurer arrangements, their credentials and financial status – this way we keep our clients fully informed so they can make an informed insurance decision. However there are those who try to confuse the client – hoping never to be caught out:
      a. Some big noise (and dreadfully outlandish claims) by a ‘small time’ businesses are actually trading ‘middle-man’ businesses and not the actual insurer. These businesses sell ‘fear’ of not having insurance but are very light on protecting assets and your investments.
      b. When your quote and policy document refers to several (more than ‘one’) underwriter or insurer, who’s actually guaranteeing to pay your claim? In fact you don’t know who’s paying, because they don’t know – and moreover because the standard answer is ‘it depends! (It depends on what?)
      c. Over recent times many, many clients have informed us that they prefer a financially sound and secure insurer because alternative insurer(s) are noted as PTY LTD company, where financial strength and financial resources are unknown or undiscoverable.
      d. When clients deal with us (and many tens of thousands have, over recent times) they are clear – our documentation is transparent. Qtrust is your Broker and we work and watch out for your interests – that’s our job, that’s what we are licenced to do. You will sometimes see Qiducia Underwriting who is the outsourced technical area acting for the Australian insurer.
      e. An insurers PDS is the definitive (the last resort and source of truth for your insurance) condition, so what it says is the all-important truth. So don’t reply on the sales agent spinning their sales lines read the PDS or ask us.
      2. Secondly, policy cover. Many things are added to insurance policies which are very, very unlikely to trigger a claimable event. Technicalities are all important in insurance because claims are paid by technicalities – not ‘love or fairness’. Our proposal and insurer(s) promise to either repair, reinstate or replace your lost property or financial status, in the event of an insurable claim. This means reinstate your financial or material position. No other owner builder Policy we know of, can make this claim in writing and in their PDS.
      3. Example of highly unlikely claimable events: ‘Increase Cost Of Working’ is not applicable to owner builders – owner builders are individuals (people) not companies. Goods in Transit applies particularly to subcontractors vehicles and not owner builders – because standard insurance protocol says, where a more appropriate and specific vehicle insurance policy is attached to a loss (for example car insurance is made for vehicle incidents) then a construction policy will not come into play – so a technical dispute is inevitable. Then of course the claim of Principal Contractor cover which by definition is impossible status for an owner builder. As a rule, inexperienced insurance sales people don’t understand this technicality, and when a claim hits; technicalities are all important. For a full list of ‘IT SOUNDS GOOD, BUT IS IT PRACTICAL OR REALISTIC COVER’, contact our office.
      The quality of insurer cannot be underestimated.

  • Mary Williams says:

    Check with your insurance agent at least once a year to make sure your policy provides adequate coverage. The addition of a room, new insulation or remodeling add value to your home and therefore may increase replacement cost.

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