Introduction:
The Victorian Managed Insurance Authority (VMIA) has recently announced a significant change that will affect builders and stakeholders in the construction industry. Starting from 1st September 2023, Domestic Building Insurance (DBI) premiums will see a substantial increase of 43%.
This post aims to provide essential information regarding the premium adjustment and its underlying reasons, ensuring builders are well-informed and prepared for the upcoming changes.
Key Points to Note:
Effective Date and Applicability of New Premiums:
The revised premiums will be applicable to all DBI policies paid and issued on or after 1st September 2023. Builders must be aware of this date to ensure compliance with the new rates.
Accessing the New Premium Rates:
Starting from 1st September 2023, builders can find the updated premium rates on the BuildVic portal. Alternatively, they can reach out to VMIA directly for the revised premium information.
Reasons for Premium Increase:
The decision to implement a substantial increase in DBI premiums is a result of multiple factors that have impacted VMIA's operations. These factors include:
Growing Claims Exposure: the VMIA has experienced a significant rise in costs due to a surge in claims arising from large builder insolvencies in the past year. This increased claims exposure has put a financial strain on the DBI portfolio, necessitating adjustments to ensure its stability.
Impact of Inflation Rates: Recent high inflation rates have also played a role in the premium increase. To account for inflationary pressures and ensure the long-term viability of the DBI portfolio, adjustments in premium rates are crucial.
VMIA's Commitment to Portfolio Stability:
The primary objective behind these premium adjustments is to safeguard the stability of the DBI portfolio. By addressing the increasing costs associated with claims from builder insolvencies and considering the impact of inflation, VMIA aims to maintain a robust insurance offering for builders and protect the interests of all stakeholders in the construction industry.
What happens to certificates in a builders BuildVic cart that haven’t been purchased / completed?
Certificates that are not purchased before 5 pm on 31 August 2023 will be withdrawn. Complete referrals must be lodged to the Builder Assessment Team by Thursday, 24 August 2023, and approved and paid for by 5 pm 31 August 2023 for the old rates to be applied.
Conclusion:
Builders and stakeholders in the construction industry need to be prepared for the upcoming 43% increase in DBI premiums. By accessing the new premium rates through the BuildVic portal or contacting the relevant authorities, builders can adapt their financial plans accordingly. Complying with these changes will ensure a stable and secure environment for construction projects in Victoria. Stay informed and navigate the shifting insurance landscape with confidence.
For more information visit the VMIA website here