1. What is NSW Home Warranty Insurance?

NSW Home Warranty Insurance provides protection for homeowners in case a builder cannot complete work or fix defects. It's a mandatory requirement for residential building work over $20,000 in New South Wales.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• \( Percentage \) — Insurance rate percentage
• \( Contract Value \) — Total value of the building contract

Explanation: The premium is calculated by applying the insurance percentage rate to the total contract value.

3. Importance of Premium Calculation

Details: Accurate premium calculation ensures proper insurance coverage compliance with NSW regulations and helps builders and homeowners budget appropriately for construction projects.

4. Using the Calculator

Tips: Enter the insurance percentage rate and contract value. Both values must be positive numbers to calculate the premium amount.

5. Frequently Asked Questions (FAQ)

Q1: When is home warranty insurance required in NSW?
A: Insurance is required for residential building work valued over $20,000, including new homes, renovations, and additions.

Q2: Who pays for home warranty insurance?
A: The builder is responsible for obtaining and paying for the insurance before starting work.

Q3: What does home warranty insurance cover?
A: It covers incomplete work, defective work, and structural defects for up to 6 years for major defects and 2 years for other defects.

Q4: How is the percentage rate determined?
A: Rates vary based on the type of work, contract value, and insurer. Builders should obtain quotes from approved insurers.

Q5: Are there exemptions to the insurance requirement?
A: Some specialized work may be exempt. Always check current NSW Fair Trading regulations for specific requirements.