iCare announces 1 July 2018 HBCF Premium Increase
iCare HBCF have announced an increase on HBCF premiums effective 1 July 2018, this increase is in line with the previously announced reforms to take the Home Building Compensation Fund to a sustainable basis.
IMPORTANT UPDATE: On Friday 29th June, iCare announced they will be postponing the changes to HBCF Insurance Premium Calculations outlined below. The changes will now come into effect from the 2nd of October 2018.
WHAT DOES A BUILDER NEED TO KNOW?
Determining the premium applicable
- You will need to disclose the actual cost of insurance to your client in your contract with them.
- Just using an estimate previously saved from the HBCF pricing calculator will not be enough.
- The actual cost is the amount you pay when you purchase the premium, this amount may differ depending on whether you purchase the insurance before or after 1/07/2018.
- iCare HBCF will allow a "Grace Period" when they have received the submission for the project in the Builder Portal or via your Broker and the submission has proceeded through the risk management process before midnight 30/06/2018, and, the policy is issued prior to midnight 30/07/2018.
How can I calculate my new premium?
Builders can check premiums via the online calculator at: www.icare.nsw.gov.au/premiumcalculator/.
What are the new premium rates?
|Base Rates to 30/06/2018 Exc. GST & Stamp Duty||Base Rates from 01/07/2018 Exc. GST & Stamp Duty|
|Construction Type||Metro||Rural||Industry Av. Policy||Increase %||Metro||Rural||Industry Av. Policy|
|C01 - New Single Dwelling Construction||0.66%||0.53%||$3,267||44%||0.95%||0.76%||$4,028|
|C02 - Multiple Dwelling Alterations/Additions (Structural)||0.58%||0.46%||$1,562||0%||0.58%||0.46%||$1,562|
|C03 - New Multiple Dwelling (Unit) Construction (Up To 3 Storeys)||1.72%||1.37%||$4,793||0%||1.72%||1.38%||$4,793|
|C04 - Single Dwelling Alterations/Additions (Structural)||0.58%||0.46%||$1,458||5%||0.61%||0.49%||$1,471|
|C05 - Swimming Pools||0.66%||0.53%||$408||2%||0.67%||0.54%||$396|
|C06 - Single Dwelling Renovations (Non-Structural)||0.34%||0.27%||$214||6%||0.36%||0.29%||$210|
|C07 - Other - not included in other construction types due to unusual circumstances||0.34%||0.27%||$216||21%||0.41%||0.33%||$209|
|C08 - Multiple Dwelling Renovations (Non-Structural)||0.34%||0.27%||$917||0%||0.34%||0.27%||$917|
|C09 - New Duplex, Dual Occupancy, Triplex and/or Terrace (attached) Construction||1.72%||1.37%||$4,793||46%||2.50%||2.00%||$6,696|
CHANGES TO THE RISK BASED PRICING REGIME
- iCare will now merge previously separate factors of the period an entity's licence has been held and the structure of the entity; The level of discounting and loading impact has been refined to change for each year an entity's licence is held (previously a longer period was applied). This means an increased discount (or lesser loading) will apply on each anniversary of issue of an entity's licence (until the overall maximum cap is reached).
- Sole traders and partnerships continue to receive a discount relative to companies and trusts. However, for each additional year an entity holds a licence, the level of reduction in loading or increase in discount will be higher for companies and trusts compared to sole traders and partnerships (until the overall maximum cap is reached). This change reflects the larger improvement in claims experience for an older company or trust compared to an older sole trader or partnership and a younger company or trust correction of an anomaly whereby a director’s assets have been included as part of the entity's assets when calculating the ANTA position for pricing purposes.
For further information about how the changes to HBCF will affect your business please contact the HBCF service team at Coverforce.