Builder collapse leaves owners with “grossly unfair” insurance s

The recent wave of developer collapses has left an unprecedented number of Victorian households waiting months for financial help.

Jarrod
By Jarrod
3 Min Read

The recent wave of developer collapses has left an unprecedented number of Victorian households waiting months for financial help.

More than 1300 property owners are reportedly still waiting on payouts from the overwhelmed state-backed insurance agency after last year’s slew of major construction company collapses.

The downfall of developing giant Porter Davis alone left 1700 Australian households in the lurch, with 462 claims being lodged the day they went insolvent.

According to the Victorian Managed Insurance Authority (VMIA), almost half of those claims (213) are still outstanding ten months later. 

Across Victoria, more than 4849 claims were submitted in that same period for incomplete homes or those with serious defects. 

With the one-year anniversary of Porter’s collapse only weeks away, 30 homeowners impacted by the insolvent builders have written a letter to Premier Jacinta Allan and the Victorian Ombudsman seeking transparency over how claims are processed.

“Our collective experiences with (the authority) have been fraught with unjustifiable delays, opaque decision-making, and outcomes that are unreasonable, oppressive, and grossly unfair,” the letter says.

More than 1600 settlement offers have so far been made to Porter Davis customers worth more than $116 million.

In response to the findings, shadow minister for home ownership and housing affordability Evan Mulholland said, “The great Australian dream has become a great Labor nightmare” for families.

“The last thing any victim of a homebuilder collapse should face is delay as they try to get their life back on track and achieve their dream of buying a home,” he added.

“Yet under Labor, hundreds have been firstly let down by the failure to enforce compulsory insurance requirements and now by a frequently unfair and protracted insurance process.

Shadow Minister for Finance Jess Wilson said the backlog of building insurance claims is a real-world consequence of the current government’s financial mismanagement.

“Labor’s mismanagement of its Big Build has created an unworkable inflationary environment for many homebuilders, with a surge in claims a result of homebuilder collapses,” she said.

“Under Labor, the VMIA has been driven into deficit and negative equity and as a result, is unable to deliver the insurance Victorians homebuyers have paid for.”

Victorian Treasurer Tim Pallas told reporters last week that the authority had been dealing with an unusually large volume of cases.

“They’ve acquitted themselves quickly and will continue to work cooperatively with those who have claims, recognising that in many cases, the state stepped in where there was no insurance capacity,” he said.

Share This Article
Jarrod
By Jarrod
Jarrod Brown combines his background in journalism, copywriting and digital marketing with a lifelong passion for storytelling. He has a strong passion for new and emerging consumer technology within the building sector. He lives on the Sunshine Coast - usually found glued to the deck of a surfboard.

Sign In

Register

Reset Password

Please enter your username or email address, you will receive a link to create a new password via email.