Resilience Latent Defects Insurance | Corey Nugent, Resilience Insurance | Market Insights EP 115

In this episode of Market Insights, Corey Nugent, CEO of Resilience Insurance, joins the discussion to unpack how Latent Defects Insurance (LDI) is reshaping consumer protection in Victoria’s apartment and strata markets.

*Global product, now protecting Victorian buyers*
Corey explains that LDI is already a proven product overseas, and is now being brought into Victoria alongside the new strata bond. Together, they’re designed to protect consumers and apartment buyers from major building defects and unexpected costs.
• Latent defects insurance is widely used and successful in markets overseas.
• Victoria is moving quickly to introduce both a strata building bond and LDI into its framework.
• The goal is to protect Victorian consumers and apartment buyers in brand-new and off-the-plan developments.

*New consumer protections in Victoria*
The Victorian Government has passed legislation to introduce a strata bond, and is working with industry to incorporate Resilience LDI into the consumer protection framework for new apartments and townhouses.
• New legislation introduces a strata bond for multi-unit developments.
• Government is working closely with Resilience to embed latent defects insurance into the system.
• Together, these measures significantly lift the level of protection for off-the-plan buyers.

*What this means for buyers*
For consumers, this framework is about confidence, certainty and security. Buyers gain protection against serious building defects so they’re not left with massive, unexpected repair bills years after settlement.
• Buyers gain peace of mind that their new apartment or townhouse is protected against structural defects.
• Major, unexpected costs are shifted away from the consumer and onto the insurance cover.
• Trust and perceived build quality improve, which is critical for the off-the-plan market.

*Bond vs latent defects insurance (LDI) for consumers*
Corey breaks down the difference between the government bond and LDI. The bond is a step forward, but it’s limited in both duration and amount, whereas LDI offers longer and broader protection.
• The bond typically covers only a small percentage of the building value.
• Bond protection is short-term, usually only for the first few years after completion.
• LDI provides much higher coverage over a 10-year period, giving consumers more meaningful protection.

*First resort vs traditional insurance*
Traditional building defect schemes have often forced owners into long, expensive legal battles before any payout. LDI changes this by being “first resort” – you claim as soon as a defect is identified, without needing to prove who’s at fault first.
• Old models required multiple legal steps and disputes before a claim could be made.
• First resort means owners can claim when the defect is discovered, not after litigation.
• The insurer takes on the investigation and resolution, removing the burden from consumers.

*Cost, pricing and benefits for developers*
From a developer’s point of view, cost pressures are real. The bond is expected to sit around 2% of the building value (similar to NSW) and is essentially unavoidable. LDI, however, can cost less than the bond while delivering full 10-year cover and operational savings via inspections.
• The government bond is anticipated to be around 2% of construction value and is a mandatory cost.
•LDI often costs less than the bond while providing full structural cover for 10 years.
• Resilience’s inspection programme during construction can identify and fix issues early, reducing rework and cost blow-outs.

*Turning a cost centre into a profit centre*
Developers already using LDI across Australia are finding that it doesn’t just reduce risk – it can actually lift enquiry and sales, effectively turning an insurance cost into a marketing advantage.
• Listings and articles flagged with LDI see higher enquiry and engagement.
• LDI can become a value-adding feature, not just another line item in the feasibility.
• Developers who adopt LDI early can differentiate their projects and justify stronger price points.

*Rewarding better builders, filtering out poor quality*
LDI is not available to everyone. It’s only accessible to better builders and developers who meet quality thresholds. Those cutting corners on quality will likely be forced to rely solely on the bond, reinforcing a market where good actors are rewarded.
• LDI is selective, designed for builders with strong quality and governance.
• Poor-quality builders who drive prices down at the expense of standards won’t qualify for LDI.
• This structure encourages higher build quality and greater confidence for buyers and lenders.
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00:00 Introduction to Resilience Insurance
00:22 Consumer Protection Legislation in Victoria
00:53 Benefits for Consumers
01:45 Comparing Government Bonds and Latent Defects Insurance
03:03 Impact on Developers
04:10 Marketing and Conversion Benefits
05:50 Conclusion and Future Outlook
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Видео Resilience Latent Defects Insurance | Corey Nugent, Resilience Insurance | Market Insights EP 115 канала Apartments