Australia's first latent defects insurance (LDI) product has finally entered the market, thanks to Resilience Insurance, a new managing general agent (MGA) incepted in Australia.
LDI, also known as decennial liability insurance or inherent defects insurance, is specially designed for high-rise residential properties.
Resilience Insurance's LDI product ensures maximum consumer protection for high-rise residential property owners and residents of medium to high-density residential properties by covering major financial losses resulting from latent defects, which have been rampant throughout the industry for decades. Additionally, the LDI program is an active participant in delivering built properties, ensuring confidence in what owners purchase.
A McCrindle report commissioned by the New South Wales (NSW) government found that only three of 10 consumers are confident in purchasing medium to high-density properties, with 64% of the respondents having shared concerns that the properties had defects. Meanwhile, 74% of prospective buyers said they will be more confident with LDI in place, and 49% said they will pay more if the property is covered by LDI.
“This is a critical step and product to introduce to restore trustworthiness into this market,” said Stefan Hicks, managing director of Resilience Insurance.
The LDI product is now available nationally, following the launch of the building regulation framework completed by the NSW government and the NSW Building Commissioner.
“With the introduction of the Design and Building Practitioners Act and the Residential Apartment Buildings Act, the NSW state government has allowed us to take a serious look into finally introducing an LDI product into Australia,” Hicks said. “The Queensland and Victorian state governments are also working strongly through building reform programs. We believe we finally have an environment where the quality of design and construction in the high-rise residential segment will improve on the back of stronger and effective policing, quality controls, and accountability.”
