On October 2019, the Financial Superintendence issued the instructions that allow the insurance companies to start placing the Inherent Defects Insurance (IDI) policies, named in Colombia as ‘Seguro Decenal’. This insurance is one of the authorized mechanisms by the Law 1796/2016 to cover the eventual damages that might be caused to the homeowners when the buildings collapse or threaten ruin during the first ten (10) years after the end of the construction period.
In accordance with the mentioned law, the IDI was subsequently regulated by the Government through the Decree 282 of 2019 as a property insurance, operating under an occurrence modality, where the premium must be paid by the construction companies and the insurance contract cannot be revoked by any party. For this type of policy, the insurer is obliged to stipulate that any coverage issues (defences) that could be alleged against the construction companies (policyholders) won’t be used against the beneficiaries of the insurance, and will indemnify those who demonstrate to be homeowners of a damaged property at the moment of the loss. This insurance will be compulsory for any construction company as from February 2021.
The protection for the brand-new homebuyers was raised as a high-priority issue for the Colombian Congress, as a consequence of the collapse of an apartments complex in Medellin on October 2013, which was generated by the lack of structural capacity of the main columns of the building.