How Builders' Warranty insurance works
Confused about Builders Warranty insurance? You’re not alone. Here are the basics.
Are you building a house? A pool? Or maybe a much-needed extension? Whatever it is, planning your project and seeing it through to completion can be an exciting experience.
Hopefully your builder will do a great job and your dream will become reality without any major hitches. But things can and do go wrong and, if your contractor doesn’t deliver the finished product or their work isn’t up to scratch, you can be left out of pocket. That’s where Builders Warranty insurance may come into play.
What is it?
It’s insurance that covers a builder’s client for loss of deposit, failure to start or finish a job and defective work on a completed job. If this happens to you, the first step is to try and recover your costs directly from your builder. But if they’ve died, disappeared or become insolvent that might not be possible. If so, you may be able to claim on the Builders Warranty policy covering your building contract.
Is it a requirement in my state?
The rules vary from state to state, but in many places it’s a legal requirement for jobs above a certain dollar amount. Different states also give it different names, but the basic legal protections are the same.
|State||Known as||Legal requirement?||More information|
|ACT||Residential Building Warranty Insurance||Yes, for work valued over $12,000||ACT Government Planning|
|NSW||Home Building Compensation Fund||Yes, for work valued over $20,000||Home Building Compensation Fund|
|Northern Territory Government|
|QLD||Home Warranty Insurance||Yes, for work valued over $3,300||Queensland Building and Construction Commission|
|SA||Building Indemnity Insurance||Yes, for work valued over $12,000||Consumer and Business Services|
|TAS||Residential Building Warranty Insurance||No, in Tasmania it's a voluntary scheme||WorkSafe Tasmania|
|VIC||Domestic Building Insurance||Yes, for work valued over $20,000||Victorian Managed Insurance Authority|
|WA||Home Indemnity Insurance||Yes, for work valued over $20,000||WA Department of Commerce|
This information is intended as a general guide only. Please check with you local building authority for the most up to date information.
How do I get it?
You don’t have to do anything. If Builders Warranty is a legal requirement for your project, your contractor will purchase it for you. No building work can be done without it. That’s because builders must submit proof of insurance to your local council before your development application can be approved.
When you sign a contract with your builder, they should provide you with a copy of the Builders Warranty certificate (which details your building contract). You’ll need this certificate to make a claim.
How to claim
To find out how to claim on QBE Builders Warranty insurance, see our Builders Warranty claim checklist – a simple guide to the claims process.
Are you an owner builder looking to sell your home? Go to Owner Builder Warranty to find out whether you need cover.