Mistakes, Disputes and Official Sources
Home warranty insurance by state: HBCF in NSW, domestic building insurance in Victoria and the QBCC scheme
How home warranty insurance works for Australian renovations, the thresholds in NSW, Victoria and Queensland, what it covers, when you can claim and the certificate to ask for.
Home warranty insurance is a safety net for homeowners, not insurance for the builder's benefit. It pays for incomplete or defective work when you cannot recover from the builder, typically because the builder has died, disappeared or become insolvent (and in some schemes, had a licence suspended or failed to comply with an order). In NSW it is the Home Building Compensation Fund (HBCF), required for residential building work over $20,000. In Victoria it is domestic building insurance (DBI), now run through the Building and Plumbing Commission and required above its threshold. In Queensland it is the Queensland Home Warranty Scheme, run by the QBCC, for most residential work over $3,300, and it covers non-completion and defects more broadly. Ask for the certificate before you pay any deposit.
This guide is part of mistakes, disputes and official sources.
The three main schemes side by side
| Feature | NSW | Victoria | Queensland |
|---|---|---|---|
| Name | Home Building Compensation Fund (HBC cover) | Domestic building insurance (DBI) | Queensland Home Warranty Scheme |
| Who runs it | icare HBCF, under the Home Building Act 1989 | Building and Plumbing Commission (previously VMIA) | QBCC |
| Threshold | Contract over $20,000 | Above the regulator's threshold (stated as $16,000) | Residential construction work over $3,300 |
| When you can claim (general) | Builder dead, disappeared, insolvent, or licence suspended for failing to comply with a tribunal or court order | Builder dead, disappeared or insolvent, and other triggers set by the scheme | Non-completion or defects where the contractor does not fix them, subject to scheme conditions |
| Premium | Paid by the builder, built into the price | Paid by the builder, built into the price | Collected with the deposit and paid to the QBCC |
NSW: Home Building Compensation Fund
For residential building work over $20,000, the contractor must have HBC cover and give you the certificate before asking for or receiving any payment or starting work. The cover follows the property, so a later buyer within the cover period can benefit.
Key points:
- Cover is a last resort: you generally claim only when you cannot pursue the builder because of death, disappearance, insolvency or licence suspension in the circumstances the law sets.
- The policy covers loss from incomplete and defective work, up to a maximum set by regulation, with periods that broadly match the statutory warranties (longer for major defects than for other defects).
- Notify the insurer in writing as soon as you become aware of defective or incomplete work, even if you are still talking to the builder. Late notice can affect a claim.
Owner-builders who sell within a set period after completing work may need HBC cover too. See owner-builder permits.
Victoria: domestic building insurance
Victoria's DBI is required for domestic building work above the threshold, under the Building Act 1993 and the Ministerial Order on domestic building insurance. Since the Building and Plumbing Commission took over the DBI function from the Victorian Managed Insurance Authority, certificates and claims are handled through the Commission. Older certificates and documents will still show VMIA.
- The builder must take out DBI before taking a deposit or starting work for a contract above the threshold.
- Like NSW, it is mainly a last resort cover triggered by the builder's death, disappearance or insolvency, with other triggers depending on the policy in force.
- Claims are limited in amount and time. Check the Commission for the current terms.
The Domestic Building Contracts Amendment Act 2025, commencing by 1 December 2026, also updates the definition of contracts that require insurance, so check how it applies to your contract.
Queensland: Home Warranty Scheme
Queensland's scheme differs in an important way: it can respond to defects and non-completion even when the contractor is still operating, if the contractor does not fix the problem when directed. That is why the QBCC's dispute process and directions to rectify are often the first step.
According to the QBCC:
- Most residential building work over $3,300 (including labour, materials and GST) needs cover, and the premium is included in the contract price.
- The contractor must pay the premium to the QBCC within 10 business days of entering into the contract.
- Structural defects: cover generally runs for 6 years and 6 months, extended to 7 years from the contract date if the build takes more than 6 months; claims must be lodged within 3 months of noticing the defect.
- Non-structural defects: you must notice them within 6 months of completion and lodge the claim within 7 months of completion.
- Non-completion: the contract must end within set periods and the claim be lodged within 3 months after it ends.
- Owner-builders are not eligible for cover on their own work, and work on buildings of more than three storeys is not residential construction work under the scheme.
What is usually not covered
- Work by an unlicensed or unregistered builder, or work outside the contract.
- Items you supplied yourself, unless the policy says otherwise.
- Loss you could have avoided by notifying in time.
- Consequential costs such as rent, unless the policy terms include them.
- Defects reported after the cover period.
How to check your cover
- Ask the builder for the certificate of insurance before paying.
- Check it names your property address, the builder and the contract value.
- Check it on the scheme operator's website where a search is available (for example, icare HBCF certificate search in NSW, or QBCC records in Queensland).
- Keep it with your contract. If you sell, give a copy to the buyer.
FAQ
Do I pay for home warranty insurance?
Indirectly. The premium is built into the contract price. In Queensland it is collected with your deposit.
Is my job below the threshold covered?
Not by the scheme. You still have rights under your contract, the statutory warranties and the Australian Consumer Law. See consumer guarantees and statutory warranties.
Can I claim if the builder is still trading?
In NSW and Victoria, generally only in the limited circumstances the scheme allows. In Queensland, a claim can follow if the contractor does not rectify after a direction. Follow the steps in building disputes.
Does insurance cover a builder who just stops turning up?
It can, if the builder has disappeared or become insolvent, or in Queensland if the contract is properly ended for non-completion. Get advice before ending a contract.
Sources
- icare NSW — Home Building Compensation Fund certificates and claims
- Building Commission NSW, via NSW Government — HBC cover thresholds
- Building and Plumbing Commission (Victoria) — domestic building insurance
- Queensland Building and Construction Commission — Queensland Home Warranty Scheme
- Victorian Legislation — Building Act 1993 and Domestic Building Contracts Act 1995
