Victoria’s state run building insurer forcing families to accept lowest-cost builders
Victoria's state run-building insurer is forcing families to accept the lowest-cost replacement builders following a string of building company collapses, causing more distress, and leaving some homeowners hundreds of thousands of dollars out of pocket.
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00:00There's been a locked caged fence around this inner city property since before COVID.
00:09This is supposed to be a home sweet home, but unfortunately it is a construction site.
00:14Siddharth Prakash and Chetna Mahadeg's builder went bust and fled the country in 2020.
00:20Kind of I feel a bit emotional sometimes coming here, seeing the state of the place.
00:26Like thousands of other Victorians, the couple made a claim with the state run Victorian
00:29managed insurance authority who handle domestic building insurance.
00:33They also found a new builder.
00:35Who did an extensive examination and found many defects.
00:40And that's what our claim to VMIA was.
00:43It was for the defects as well as incomplete works.
00:48The couple obtained quotes from other builders, while the VMIA provided a quote from its approved
00:52builder which was $200,000 cheaper.
00:55They had a miracle quote.
00:57It meant no payout was needed.
00:59Other families in similar situations have also complained to the ABC about the VMIA underquoting.
01:05We felt that the process disadvantaged a builder who had done a forensic examination of the
01:11place, identified all the defects and gave an honest cost to complete.
01:16Negotiations continue, but a resolution includes a non-disparagement agreement.
01:21Spoken to many other families who have been burnt by the VMIA, overwhelmingly they complain
01:26about a hostile process and are afraid to speak out for fear of retaliation.
01:30I think it's a form of bullying.
01:32I mean the best form of medicine for this government and the VMIA should actually be
01:37transparency, accountability, honesty.
01:42The collapse of Porter Davis has affected thousands of people around the country.
01:45Yeah, so this is our house, this is our dream.
01:48When the builder went under, this couple were left with an unfinished home.
01:52We've had many different structural defects, including the garage and a brick wall collapse.
02:00Jared and Chantelle Ford obtained quotes from two builders with itemised details of defects.
02:05The VMIA also provided a cheaper quote from volume builder Simmons.
02:09On this wall there's a two and a half centimetre bow.
02:12The couple says VMIA's offer doesn't cover all the problems and to finish it would cost
02:17hundreds of thousands of dollars.
02:19It's now in litigation.
02:20What's the point of having insurance if they're not going to help you when you're in trouble?
02:26The VMIA could not comment on individual cases.
02:29It said it worked with established large builders with economies of scale and that in nearly
02:33all cases homeowners that proceeded with VMIA nominated builders will get in their home
02:38sooner and with lower out of pocket costs than if they engaged their own builder.
02:43I feel betrayed.
02:47It's really, I feel sick.
02:49It's frustrating.
02:50Just turn their back on us.
02:52Betrayed us.
02:53Yeah.
02:54For now their dreams remain locked up.