12 Jun VMIA – Upcoming DBI premium increase

VMIA UPDATE – JUNE 2024

Key Points:

• DBI premiums increasing from 6 August 2024
• Single Dwellings increase by 65%
• Multi-unit increase by 65%
• Structural and Non-Structural alterations/additions increase by 20%
• Owner Builders increase by 65%
  

 

VMIA has announced an upcoming DBI premium increase.  This will be effective from 6 August 2024.

 

We recommend reviewing all your project costings and revising your insurance costs as well as inputting the changes in any of your estimating systems and software.

Should you have any queries about these increases or require any assistance in calculating the premiums for upcoming increases, please do not hesitate to reach out to our office.  As always, we are here to assist and support you with any of your insurance queries.

 

What is happening?

Premiums for all domestic building insurance (DBI) policies will increase by 53% on average from 6 August 2024. Specifically:

• Premiums will increase by 65% for new single dwellings and new multi-unit dwellings
• Premiums will increase by 20% for structural renovations, non-structural renovations, and swimming pools.
• Premiums will increase by 65% for Owner-Builders

 

Why are premiums increasing?

Domestic Building Insurance plays a critical role in bringing peace of mind to customers of builders at a time of industry uncertainty. A record number of Victorians have received DBI settlements over the past 12 months to finish their new homes. Since 1 July 2023, VMIA has resolved over 4,000 Domestic Building Insurance (DBI) claims. They have made record claims payments due to the compounding factors of builder insolvencies, high inflation and skilled worker shortages, all of which impact build costs.

This means VMIA has to increase DBI premiums to ensure that homeowners continue to be protected when builders are unable to complete or rectify homes. DBI premiums in Victoria remain lower than comparative premiums in NSW – and they are significantly lower for new builds.

 

When does the change come into effect?

The new premium rate will apply from 6 August 2024.

 

When will system changes be in place to accommodate this increase?

The system changes will be ready by 6 August 2024.

 

How will the change work for flat price builders?

An update will be provided for builders with a flat rate shortly.

 

How do builders calculate their premium?

Builders can continue to check current premium pricing through the BuildVic portal at buildvic.vic.gov.au. For the revised premium that will apply from 6 August 2024, builders should consult our office.

 

Will there be a grace period for the changeover to the new rates?

No, the new rates will apply for policies paid for and issued on or after 6 August 2024.

 

What happens to certificates in a builder’s BuildVic cart that haven’t been purchased?

Certificates in a BuildVic cart that are not purchased before 5pm 5 August 2024 will be withdrawn. Any referred certificates will be assessed by the Builder Assessment Team by 30 July 2024.

 

What if a certificate is purchased on or before 5 August 2024 but an amendment is required on or after 6 August 2024?

VMIA may apply the new premium rate to any request for an amendment on or after 6 August 2024.

 

Will premiums rise again?

VMIA continually monitors market circumstances and emerging trends, and reviews premiums annually.

 

Do you have more questions or want to discuss this further?

Whether it is DBI or other construction related insurance, CCM is here to help and is dedicated to providing you with a greater depth of service and advice.  Please feel free to call us at any time on 9853 4688.