VIC Insurance won't fix as building codes changed

[TLM]

We have recently had the laserlite on our pergola damaged due to hail. This is the third time this has occurred.
The first two times, the insurance company organised a company to oversee the repairs (full replacement of laserlite panels).
This time, the chosen builder (by the insurance company) has said they will not do the job as the building codes have changed and they will not guarantee their work. The insurance company wants to pay us out.
My question is - if that builder won't guarantee his work - then what reputable builder will?
Shouldn't the insurance company have to fix it (our home and contents is new for old) so that it is building code compliant?
Thanks in advance.

 

[Zerojay]

A home buildings policy typically includes as an additional benefit the additional cost of upgrading to meet current building codes. However there is usually also a clause saying that repair or replacement is restricted to property damaged by an insured event. So in your case, if the roof sheets required upgrading then the additional cost should be covered. If however it is the pergola structure that needs to be upgraded, this is not damaged property and is not covered.
From the builder’s point of view, he does not want his name attached to the repair of the pergola that does not meet the code as there is usually a guarantee of workmanship and also the possibility of a future liability issue if the pergola should collapse causing damage to other property or injury.
Your policy may also say that it is the insurer’s choice to either arrange repair or pay the cost of repair. However if the claim is cash settled it must be for an amount that is sufficient for you to arrange another repairer to carry out the work. For example if the insurer pays you $1500 (net of your excess) but you cannot find anyone to do the work for less than $2000 ( net of excess), then you should be entitled to further payment of $500.
You may find it difficult to get a reputable builder to provide a guarantee for the reasons above. Replacing the sheets is not complex and a handyman could handle it but may not provide a guarantee.
This can be a grey area of interpretation of the policy wording and insurance law so if you are not satisfied you should use your insurer’s dispute resolution process and if still not happy after that, lodge a complaint with the Financial Services Ombudsman. The greyness is because the insurer has an obligation to reinstate the property and repair may not be possible without some upgrading. Where that obligation applies and ends is debatable.
I do not give legal advice. Just my opinion based on 20 years of experience working for an insurance company.

 

[TLM]

A home buildings policy typically includes as an additional benefit the additional cost of upgrading to meet current building codes. However there is usually also a clause saying that repair or replacement is restricted to property damaged by an insured event. So in your case, if the roof sheets required upgrading then the additional cost should be covered. If however it is the pergola structure that needs to be upgraded, this is not damaged property and is not covered.
From the builder’s point of view, he does not want his name attached to the repair of the pergola that does not meet the code as there is usually a guarantee of workmanship and also the possibility of a future liability issue if the pergola should collapse causing damage to other property or injury.
Your policy may also say that it is the insurer’s choice to either arrange repair or pay the cost of repair. However if the claim is cash settled it must be for an amount that is sufficient for you to arrange another repairer to carry out the work. For example if the insurer pays you $1500 (net of your excess) but you cannot find anyone to do the work for less than $2000 ( net of excess), then you should be entitled to further payment of $500.
You may find it difficult to get a reputable builder to provide a guarantee for the reasons above. Replacing the sheets is not complex and a handyman could handle it but may not provide a guarantee.
This can be a grey area of interpretation of the policy wording and insurance law so if you are not satisfied you should use your insurer’s dispute resolution process and if still not happy after that, lodge a complaint with the Financial Services Ombudsman. The greyness is because the insurer has an obligation to reinstate the property and repair may not be possible without some upgrading. Where that obligation applies and ends is debatable.
I do not give legal advice. Just my opinion based on 20 years of experience working for an insurance company.

Thank you so much for your reply and explanation. The actual structure of the pergola has not been damaged. I’m unsure now whether the insurance builder was concerned about the pergola structure or that the way the roofing sheets have been laid in the past (too far apart) are the problem. I will need to have this clarified. I have written to the insurer to say they are meant to pay for upgrades to allow repair (as per our policy) so am awaiting their response.Thanks again for your clarification of the different points of view.