Dead, disappeared, or insolvent
Dead Disappeared OR Insolvent…
Sounds like an old western movie doesn’t it?
Until you read the word… ‘Insolvent’
And who cares anyway?
Well, homeowners with defective dwellings do.
If a homeowner in Victoria has incomplete building works or defective building works they need 1 of these 3 things to claim on Domestic Builders Warranty Insurance:
- death
- disappearance
- insolvency
To claim, they must not only prove defects and incomplete work but a trigger event has occurred. This is how DBI in Victoria works and for which is now solely issued by the insurer the VMIA and managed by the Building and Plumbing Commission.
But here’s a twist, I was checking the definition of ‘Insolvency’ under the policy again today for a client and noticed something off…
Whilst the definition of insolvency (ie the bankruptcy of a company) requires the builder be ‘externally administered’ within the meaning of the Corporations Act 2001 (Cth) and which makes sense and is good to know…
BUT
I also noticed an apparent error in the policy in reference to the bankruptcy of an individual.
Bizarrely it also references the Corporations Act 2001 (Cth) in relation to an individual being insolvent.
Well that is confusing and not possible.
Personal insolvency in Australia is regulated by the Bankruptcy Act.
Anyway this is a snap of a policy wording dating back a few years…have the BPC who now administers DBI in Victoria updated this?
Also, does anyone know if they have ever tried to deny a claim over it ? I can’t imagine they would, but those who work in this field know just how hard VMIA and BPC fight consumers on DBI claims…
This article is a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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