Latest / Best of Business / Jenee Tibshraeny: NZ Herald Wellington business editor on the concerns for what Government building overhaul means for homeowners

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Jenee Tibshraeny: NZ Herald Wellington business editor on the concerns for what Government building overhaul means for homeowners · Best of Business

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  Speaker 2: Now, there are homes that concerns rather that the government's
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  Speaker 2: proposed building overhaul might leave homeowners in the lurch. Essentially,
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  Speaker 2: what the government's doing is they want to remove some
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  Speaker 2: of the responsibility for defective buildings from councils and instead
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  Speaker 2: make the builders and the trades and so on responsible
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  Speaker 2: for their work. But that is where the plan hits
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  Speaker 2: a snag. Genative Traine as The Herald's Wellington Business editor
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  Speaker 2: and with us Hello Jane, Hi, Heather. So in this case,
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  Speaker 2: the trade's would have to be insured. But that's the problem,
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  Speaker 2: right whether they can actually get insurance.
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  Speaker 3: That's the thing. So if you are shifting the liability
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  Speaker 3: to the people who cause the problem, the trade's and
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  Speaker 3: so on, that's all fair and well. But these tradees
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  Speaker 3: don't necessarily have deep pockets. So if you have a
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  Speaker 3: problem with your with your home, you chase your builder.
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  Speaker 3: Your builder can say that we're liquidating the company, or
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  Speaker 3: it can or the builder can just say, look, we
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  Speaker 3: can't pay, we can't pay you. We're just two guys
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  Speaker 3: and we can't pay you out, So then I guess
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  Speaker 3: you go, well, hopefully the builder has insurance. All the
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  Speaker 3: builders offered you some sort of guarantee, warranty or whatever
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  Speaker 3: on the building work. The government is looking at when
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  Speaker 3: it makes this change, it's looking at making these consumer
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  Speaker 3: protections mandatory. But I spoke to someone from the insurance industry,
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  Speaker 3: Stanford Insurance Director Duncan Colebrook. He's one of the guys
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  Speaker 3: that provides this insurance cover for the builders, and he's saying, look,
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  Speaker 3: we're not going to just ensure any old builder. You know,
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  Speaker 3: they have strong underwriting processes, and of course insurance companies
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  Speaker 3: don't want to lose money. They can't just ensure everyone.
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  Speaker 3: So the insurance industry doesn't seem to be that keen
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  Speaker 3: on what the government's proposing, because you know, they're not
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  Speaker 3: going to provide blanket cover for every trade, every builder,
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  Speaker 3: every building.
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  Speaker 2: So what's the alternative.
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  Speaker 3: Well, you know, this is all still being worked through,
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  Speaker 3: but as it stands, it seems like there's a risk
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  Speaker 3: that the homeowner will be exposed because if if it
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  Speaker 3: is not entirely ensured, and the pockets of these builders
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  Speaker 3: and things aren't that deep, then it could leave you
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  Speaker 3: in the lurch. Duncan Colebrook, he from Stanford Insurance, said
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  Speaker 3: to me, well, you know, if the government wants to
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  Speaker 3: make the stuff mandatory, like consumer protections mandatory, then maybe
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  Speaker 3: it needs to step in and provide some sort of
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  Speaker 3: insurance cover. But you know that he made the point
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  Speaker 3: that is the exact thing the government is trying to avoid.
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  Speaker 3: You know, it's trying to get rid of their liability
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  Speaker 3: on councils, which kind of comes back on the government.
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  Speaker 3: So you're really it does leave you in a sort
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  Speaker 3: of scratching your head. Another insurance Brokerray spoke to Ben Recard.
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  Speaker 3: He said, well, you know, insurance are hesitant about providing
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  Speaker 3: this kind of cover. You know, it's specialist cover because
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  Speaker 3: normally an insurance company provides cover for a year, like
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  Speaker 3: for your house, it looks at the risk, provides cover
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  Speaker 3: for a year next year, reassesses changes the premium, does
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  Speaker 3: it again. But this is this type of stuff is
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  Speaker 3: for like ten years. Yeah, I know it's quite risky
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  Speaker 3: ten years. There's some hesitancy there.
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  Speaker 2: But this goes some way to explaining why the government
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  Speaker 2: only half announced the thing, right, because we were expecting
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  Speaker 2: an announcement of yes, we're changing where the responsibility lies,
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  Speaker 2: and this is what's going to back it up. But
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  Speaker 2: we only got the changing of the responsibility, not the
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  Speaker 2: backing up because it's too complicated.
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  Speaker 3: Well exactly. So the theory is nice, let's not cripple counsels.
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  Speaker 3: You know, with the leaky home saga many years ago,
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  Speaker 3: councils get left with this big bill, rate payers end
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  Speaker 3: up paying for it. It sounds nice. We all like that,
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  Speaker 3: make the bill, make the naughty people pay. But there's
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  Speaker 3: some fundamental details there. You know. If the insurance industry
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  Speaker 3: is not rushing in to say that's that's fine with us,
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  Speaker 3: then I still have major questions of exactly how this
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  Speaker 3: is going to work.
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  Speaker 2: Yeah, totally all right, let's see what they come up with.
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  Speaker 2: We'll have to wait for Chris Pink to figure it out.
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  Speaker 2: Thank you so much to know I appreciate it. Jenetib Shraney,
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  Speaker 2: the Herald's Welling and Business editor.
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