We report every two years on the adequacy and validity of the Victorian Managed Insurance Authority domestic building insurance (DBI) premiums.
Domestic building insurance premium validation reports
Overview
Every two years, we report on the adequacy and validity of the Victorian Managed Insurance Authority’s (VMIA) domestic building insurance (DBI) premiums.
View the latest premium validation review summary report
This summary report outlines our main conclusions about the adequacy and validity of the Victorian Managed Insurance Authority’s (VMIA) domestic building insurance (DBI) premiums for the period 1 July 2014 to 30 June 2016.
Findings from our 2014-16 summary report
The VMIA's premiums are sufficient
The VMIA’s DBI premiums are at sufficient levels to cover expenses, risks and long-term claim costs. While claim costs increased during our 1 July 2014 to 30 June 2016 review period, the costs associated with handling and administering claims (expenses) declined.
The VMIA's premium coverage is not excessive
The VMIA’s premiums are reasonable and not set above the level required to cover expenses and long-term claims costs. Even though the VMIA's expenses and long terms claims costs changed during our 1 July 2014 to 30 June 2016 period, it decided not to adjust its premiums. We consider this decision to be pragmatic and reasonable.
The VMIA’s underwriting standards conform to commercial standards
The VMIA’s underwriting standards conform to commercial standards. While the VMIA provides DBI to some builders that could be regarded as 'higher-risk', it manages the additional risk by placing conditions on their eligibility for DBI. This appears to be reasonable given the VMIA's position as the main provider of DBI.