Is code of compliance required to insure a home?
The answer is – it depends. This guide will give you an understanding of the position that initio takes, and will look at why houses might not have the required code of compliance.
Existing Homes that are Insurable
It’s quite common for older homes to have no code compliance certificate. Reasons for this include:
- the home was built before legislation required a code compliance certificate. Current building code of compliance requirements came into force in 1992.
- the addition or alteration was built before legislation required a building consent.
- the Council may have lost paper records including the building consent. A number of councils had fires and floods before their data was stored electronically.
- the previous owner did not obtain a building consent for an addition or garage.
If this is why your home does not have a compliance certificate, it is likely that we will be able to insure your home. A home without a code compliance certificate does not always mean the home is non-compliant.
We would need you to confirm that the home is structurally sound and well maintained. You may have checked the home yourself and are confident of this, or if it is a new home you are purchasing you might have received a builders report confirming its condition.
If the home has building work such as additions and alterations without council sign off, we would require assurances that the building work would have met the building requirements at the time it was built. We also would require confirmation that the building work is structurally sound, well maintained with no known reason for its lack of compliance.
When building a new home a code compliance certificate is required before the homeowner can move in. Generally where it has been refused, the builder or construction company will rectify any outstanding defects and insurance cover will continue under the contract works (construction risks) policy. Occasionally there will be a situation where the home is able to be lived in, and the outstanding work is minor. Insurance cover will not be provided by initio if the home does not have a code compliance certificate and will be unoccupied.
Examples of where initio can provide cover for a non-compliant home are:
- Compliance certificate not signed off as driveway is unfinished. Driveway concrete will not be laid until construction is complete on the neighbouring home as trucks are using the driveway for access. The home is structurally complete, fully secure and lockable, and is being lived in. Cover was able to be provided.
- Final code compliance check was completed by the council in December, minor and non-structural defects were identified, and repairs where completed. Due to the Christmas break council staff were not able to return to issue the code compliance certificate until mid January. The home was structurally complete, fully secure and lockable, and being lived in. Cover was able to be provided.
If we agree to provide cover on your new build that has not received a code compliance certificate, conditions similar to the following will apply.
- any additional costs associated with making the home compliant will not be covered.
- any losses that arise from the lack of compliance will not be covered.
- any losses that arise from the construction perils to complete the home and obtain compliance will not be covered.
- Code Compliance Certificate required to be obtained within 30 days.
Non-compliant Loss Example
An example of a loss not covered by the initio house insurance policy would be where a non-compliant deck was added onto a house. The deck then collapses and also causes damage to the home. If the collapse of the deck was proved to be a direct result of its non-compliance, then the damage to the deck and home would not be covered.
Note that any loss that is not a direct result of non-compliance (such as a storm or fire) will remain covered by the initio policy. For a total loss in this example initio would pay to rebuild the house and deck, however if you wanted the rebuilt deck to be up to code standards you would need to pay for the additional costs to make it compliant.
Examples of homes that are not insurable
It is unlikely we would be able to offer insurance if your home does not have a code compliance certificate for reasons such as the following:
- Code of compliance certificate was applied for, but the building work contained defects which were not rectified.
- House was self built and consents were never obtained.
- Home is a converted building (such as woolshed or garage) and the conversion was not consented.
- A certificate of acceptance was applied for and not issued because the building work contained defects.
- A safe and sanitary report confirmed the building work was unsafe and/or unsanitary.
- The builders report on the home identified that the building was not structurally sound.
How do you legalise exisiting building work?
Building work carried out before 1 July 1992 without the appropriate building approval requires a safe and sanitary report. A safe and sanitary report does not serve as an approval of the unauthorised work, merely a reassurance that the building is safe and sanitary. You will need to engage a professional such as a private building consultant or registered engineer to complete this report. It will be held on file with the local council.
A certificate of acceptance is the appropriate way to legalise any work done after 1 July 1992. It provides limited assurance that the council has inspected the home and the completed building work complies with the building code at the time and contains no obvious defects.
Learn more about the different types of house insurance:
Landlord insurance – all in one house and landlord insurance, including loss of rents, malicious damage & more.
Multi unit insurance – for serious landlords with multiple units under the same roof.
Holiday home insurance – for the bach and for holiday homes that are also rented out (eg Bookabach, AirBnB)
Home insurance – for your own home, and contents.