QBE has begun paying out Home Warranty Insurance claims for victims of the Sublime Constructions and Development collapse 10 months after the building company went into liquidation.
The company said the news a related entity, Sublime Builders, had gone into voluntary liquidation "has triggered the cover under Home Warranty Insurance in accordance with the statute".
QBE has long maintained that because the HWI certificates had been obtained in the name of Sublime Builders, not Sublime Constructions and Development, it did not have to pay out an estimated $1.2 million to victims of the $4.5 million building company collapse.
Many owners had been left $100,000 or more out of pocket with partly completed houses they have since had to self fund.
The refusal raised concerns that up to 13 homes in the ACT did not have statutory home warranty insurance cover.
While the QBE payments are capped by law at $84,500 and do not cover all of the losses many individuals have experienced, they are being welcomed.
"It is better late than never," Tanya Nguyen, one of the first victims contacted by QBE after Fairfax asked the company what it was doing in response to the Sublime Builders liquidation on Wednesday.
Ms Nguyen said the money had gone into her account on Thursday night.
"I've transferred it straight off my home loan," she said. "I believe it is the pressure that was applied by the Canberra Times that resulted in my claim being settled so quickly."
Other former Sublime Constructions and Development clients, including Aler Locus and his partner Emma , will have to wait longer. They did not lodge claims after QBE told them earlier this year it would not pay out in any case.
"There didn't seem to be any point," Mr Locus said.
Victims of the failure of Sublime Constructions and Development and the ACT Government's Environment and Planning Directorate have previously rejected QBE's assertion it did not have to pay out on HWI claims because of the name confusion.
Craig Simmons, the EPD's director of construction services, said under Section 92 of the ACT Building Act, QBE had to pay regardless of what name was recorded as the applicant.
"Our interpretation of Section 92 is that its intent is to say what is being insured is the thing on the block. It is about what is being constructed," he said.
Following an investigation by the Office of Regulatory Services in October QBE's failure to compensate Sublime Constructions and Development victims was referred to the Australian Securities and Investment Commission.
ACT Policing is investigating separate claims Sublime Constructions and Development altered the Home Warranty Insurance certificates issued by QBE in order to trick clients, including Ms Nguyen, into signing their contracts.
The investigation won't be completed until midway through 2015, a spokeswoman has said.
QBE said it had "made multiple offers of settlement to homeowners who have been affected, and we have now processed payment for two of those homeowners.
"If a certificate has been generated from the QBE system by the insurance broker on behalf of the insured builder, QBE will pay these claims."
QBE had recently told Ms Nguyen it was waiting on a "trigger".
"They contacted me on Tuesday, told me Sublime Builders was going into liquidation and that my claim was finally being assessed," she said.