Saturday, September 12, 2009

Insurance against housing defects? Two insurance products......

Under the current Housing Development (Control & Licensing) Regulations 1989, house buyers are given a 24-month defect warranty period..... But which house buyers do not want more nowadays, especially involving defects in materials and labour, and building envelope, including defects resulting in water penetration given the fact that shoddy workmanship and usage of low quality materials are common and widespread!. The existing 24 months should be extended to a period of at least 72 months demanded by many Consumer's Associations nationwide over the last couple of years.
However, which developer is willing to acede to such demand?
In the recent meeting on the 24th August this year between the Housing and Local Government Ministry, National House Buyers Association (HBA) and the various stakeholders in the building industry has endorsed a decision to introduce a newly mooted (by PIAM) "Housing Defects Liability Insurance" to make it mandatory for all developers in this country to buy for the purpose to safeguard the house buyers. In addition, house buyers can also have another option to purchase a "House Defective" Insurance policy...

Looks like the non-life insurance industry has proposed two different products within a three hours sitting during this 24th August's meet:
1. Housing Defective Liability Insurance (Mandatory for all developers)
2. House Defective Insurance

Well, the industry is still silent about the conceptual aspects of these two new products... Anyway, it is extremely important that the Ministry also enforce certain benchmarks in respect of both quality and standards to be adopted by all contractors, otherwise, it would be back to square one, ie. passing all possible grouses and claims for damages to the insurance industry.....and the premiums go up, which then would cascade down to the house buyers' pocket! Ultimately the house buyers are still paying for the inadequacies and inefficiencies of developers and contractors that they appointed. Looks like CIDB would have to improve further.

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