24 July 2002

Insurance Benchmark for Building Industry by Archicentre goes National

.......the building industry is going through an insurance crisis and now is the time for companies to stand behind the quality of their work with their own money.

The Australian home building and construction industry can no longer depend on a bottomless pit of insurance premiums to pay for dodgy poor quality work and will face the position of part self insurance it was claimed today.

Mr Robert Caulfield, Managing Director of Archicentre, the home advisory service of the Royal Australian Institute of Architects, today announced the first self insurance program to complement its professional indemnity insurance.

From today homebuyers using Archicentre pre-purchase inspection services will be automatically covered for up to $10,000 for rectification of any serious structural fault found to occur in the home within twelve months.

The new innovative FREE $10,000 structural guarantee will apply to all home buyers around Australia utilising pre-purchase inspection reports by Archicentre.

Mr Caulfield said, "The Archicentre 12-Month Structural Guarantee has a $500.00 claims excess, but will create confidence in the residential real estate market for both buyers and sellers."

"We believe our move to break new ground in this area will force the rest of the industry to follow leading to an improvement all round for home buyers and vendors."

The concept we believe could be adopted as part of the insurance industry solution.

"The bottomline is that companies need to take more responsibility for their work to limit the demand on insurance which has forced the industry into crisis."

"The days of 'she'll be right mate - just claim it on insurance', are over."

Mr Caulfield said that the insurance crisis in the building industry has added between 5% to 15% to housing and renovation costs. This is an unsustainable position in relation to affordability of housing in Australia.

"When people are spending from $100,000 to $1 million plus on a home, this added structural guarantee will be both a practical and an emotional support."

With a network of 900 architects across Australia, Archicentre is Australia's largest independent pre-purchase home inspection service conducting up to 20,000 reports annually on properties valued at $6 billion.

Mr Caulfield said that the structural guarantee will be a major bonus, particularly for people wanting to purchase and renovate older homes.

"Many of these older homes are ripe for restoration and renovation with the main concern for purchasers relating to structural soundness and the cost of repairs."

"The Archicentre pre-purchase inspection report provides an extensive survey of the condition of the home so buyers can make an informed decision on their purchase. The introduction of the FREE $10,000 Archicentre 12-Month Structural Guarantee will offer extra peace of mind for home buyers during the inspection process.

The average price of homes inspected by Archicentre across Australia ranges between $200,000 to $900,000 with planned renovations usually between $40,000 to $400,000.

Media Enquiries:
Robert Caulfield Managing Director Archicentre (03) 9819 4577 Mobile 0412 381 306
Ron Smith Corporate Media Communications (03) 98185700 Mobile 0417 329 201

ARCHICENTRE $10,000 GUARANTEE FACT SHEET

Q What does the guarantee cover?

A Following a pre-purchase inspection, the guarantee will cover all structural defects provided that the inspection report did not find structural defect. If the inspection report identified structural defects the guarantee will not cover that specific problem but will cover all other structural elements.

Q How much is the cover?

A Archicentre will cover any serious structural fault up to the combined value of $10,000 for a period of twelve months after the inspection. There is a $500 claims excess payable.

Q How much does it cost?

A The guarantee is automatic with every pre-purchase inspection, but the client must sign and return the guarantee form. The cost of a typical inspection is around $380. to $500.

Q How do I make a claim?

A If during the twelve month period following the inspection, provided the guarantee has been taken up, if a client thinks that a serious structural problem has developed or been missed, they should put their claim in writing to Archicentre. Archicentre will charge a $75 assessment fee and if the problem is deemed by Archicentre to be a serious structural problem, Archicentre will refund the assessment fee and arrange to have the problem fixed, or make a financial contribution up to the value of $10,000 once the $500 claims excess has been taken into consideration. The $75 will be deducted from the excess.

Q What is not covered by the guarantee?

A The guarantee does not cover items which do not seriously affect the stability of the structure. Serious structural cracks are those which are wider than 15mm as defined by Category 4 Appendix C of Australian Standard AS 2870 - 1996. Faults which are not of a structural nature include faults with services, finishes and fittings.

Q What is a serious structural problem?

A A problem which seriously affects the structural integrity of the home and costs more than $500 to fix.