What is Inherent Defects Insurance?

Inherent defects insurance provides peace of mind by safeguarding against unexpected repair costs caused by defects present when the building was first constructed. It benefits new builds or major renovations, protecting you financially if hidden defects arise after construction.

How does inherent defects insurance differ from a standard warranty?

While both provide repair coverage, a standard warranty typically addresses everyday wear and tear issues. In contrast, inherent defects insurance explicitly covers problems caused by structural or construction defects that were present from the beginning.

What does inherent defects insurance cover?

Inherent defects insurance covers defects in the structure of the building, including issues with the foundation, roof, load-bearing walls, and other vital parts of the property. It also covers defects that arise from poor workmanship or the use of substandard materials that affect the property’s long-term stability and safety.

How long does inherent defects insurance last?

The coverage normally lasts 10 to 12 years, depending on the policy and provider. This long-term protection ensures that significant defects discovered after the building is completed are covered for many years after construction.

Is inherent defects insurance mandatory for new builds?

While not always legally required, inherent defects insurance is highly recommended and often a requirement from mortgage lenders or developers. It protects the property owner and the builder, ensuring severe defects are managed and repaired without incurring hefty costs.

Can inherent defects insurance be transferred to a new owner?

If you sell your property, inherent defects insurance can often be transferred to a new owner. This makes it a valuable asset for both buyers and sellers, as it provides future protection for any latent defects that may appear after the property changes hands.

Does inherent defects insurance cover repairs for cosmetic issues?

No, inherent defects insurance does not cover cosmetic defects such as paintwork, floor finishes, or other non-structural issues. The policy focuses on severe defects affecting the building’s stability, safety, or functionality.

Does inherent defects insurance cover damage caused by natural disasters or accidents?

No, it is for defects related to the original construction, such as faulty design or poor workmanship. Damage from external factors like natural disasters (e.g., floods, earthquakes) or accidents (e.g., fire or vandalism) would require a different type of insurance, such as buildings or contents insurance.

Will inherent defects insurance cover the entire cost of repairs?

In most cases, it will cover the full cost of repairs for covered defects, including the cost of materials and labour. However, depending on the policy, there may be some exclusions or limits.

Are there any exclusions to what inherent defects insurance covers?

Some standard exclusions may include cosmetic defects, wear and tear, and defects caused by neglect or lack of maintenance. Issues that arise from changes or alterations made after construction may not be covered.

How much does inherent defects insurance cost?

The cost depends on various factors, including the property’s size and value, the construction’s complexity, and the required coverage level.

Is inherent defects insurance the same as structural warranty insurance?

In some cases, the terms may be used interchangeably, but it’s important to note that not all structural warranties offer the same level of protection as inherent defects insurance. Both cover structural issues, but inherent defects insurance is often more comprehensive and longer-term, ensuring ongoing protection for a more extended period.

Can inherent defects insurance be obtained for commercial properties

Yes, inherent defects insurance can be obtained for commercial and residential properties. The policy works similarly, offering coverage for defects related to the structure and foundation of the property, ensuring businesses are protected from costly repair expenses.