Three schemes, side by side
NSW: Home Building Compensation Fund
When it is required. The law requires it for most residential building work worth more than $20,000, unless an exemption applies.
When it pays. Only as a last resort: if the builder becomes insolvent, dies, disappears, or has their licence suspended for not complying with a money order made in your favour by NCAT or a court.
Limit. $340,000 per policy, or $300,000 for policies issued before 1 February 2012, counting any claims by previous owners.
Queensland: Queensland Home Warranty Scheme
When it is required. For all residential construction work valued at more than $3,300, including materials, labour and GST. The contractor collects the premium from you and pays it to the QBCC before work begins.
When it pays. If the contractor does not or cannot finish the work, does not fix defects, or if the building suffers subsidence or settlement.
Limit. Up to $200,000 for each category of loss, or $300,000 with optional additional cover.
Victoria: Home Warranty
When it is required. For eligible domestic building work valued at more than $20,000, under contracts signed on or after 1 July 2026.
When it pays. It may apply where eligible work is unfinished, defective or non-compliant and the builder fails or refuses to finish or repair it. It is not limited to a builder who has died, disappeared or become insolvent.
Limit. Up to $400,000 in total per home, subject to eligibility, limits and exclusions.
South Australia has its own scheme, building indemnity insurance, which builders must arrange for domestic building work that needs council approval and costs $20,000 or more. It protects you if the builder dies, disappears or becomes insolvent.
Victoria moved to a new scheme on 1 July 2026
- Contracts signed before 1 July 2026
Domestic Building Insurance (DBI) may apply. It was required for domestic building work valued over $16,000, and for homes up to three storeys has generally covered up to $300,000 for loss because the builder died, disappeared or became insolvent. A DBI certificate issued before that date keeps its cover, and DBI cover does not transfer to Home Warranty.
- Contracts signed on or after 1 July 2026
Home Warranty may apply instead, provided by the BPC for new eligible domestic building work. Cover starts from the earliest of the builder paying the premium, starting the work or signing the major domestic building contract. The builder must pay the premium within 10 business days of signing, or before work starts if that is sooner.
If you hire an unregistered builder for work that only a registered builder may do, Home Warranty will not protect you. That is one more reason to check the register first.
See the certificate before you pay
In NSW, your builder must give you a certificate of insurance for your specific property before any work starts, and before you pay any money under the contract, including a deposit. Where cover is required, a contractor breaks the law by asking for a deposit or any other payment before the cover is in place and you have the certificate.
icare suggests checking three things on it:
- the builder’s name matches the contract, the licence and the certificate
- the address of the property is right
- the description of the work is what you agreed to.
You can confirm a NSW certificate on the HBC Check on Verify NSW. In Queensland, look out for the QHWS Notice of Cover, which the QBCC emails to you; if it does not arrive, ask your contractor whether they have paid the premium. In Victoria, the BPC suggests checking before you sign when the premium will be paid and when you will receive your Notice of Cover.
How long cover lasts, and when to claim
Each scheme has two clocks: how long the work is covered, and how soon you must claim once you know about a problem. Missing the second can matter as much as the first.
| Scheme | Cover lasts | When to claim |
|---|---|---|
| NSW HBCF | Major defects up to 6 years from completion; other defects up to 2 years; unfinished or unstarted work up to 12 months from the date work stopped or failed to start | A defect found in the final 6 months of cover may give you a further 6 months to tell icare |
| Queensland QHWS | 6 years 6 months from the earliest of paying the premium, agreeing to a contract or work starting | Structural defects: within 3 months of first becoming aware of them. Non-structural defects: noticed within 6 months, and claimed within 7 months, of the work being substantially complete |
| Victoria Home Warranty | Major defects up to 6 years after completion; other defects or non-compliant work up to 2 years | Defective or non-compliant work: within 12 months of becoming aware, or when you should reasonably have become aware. Incomplete work: within 12 months of the relevant event |
The schemes also limit what they pay if you have paid ahead. The QBCC says cover is affected if you pay your contractor more than the law or your contract allows, and Victoria’s BPC says the assistance available may depend on whether progress payments were made before stages were complete. Notice 03 covers deposits and stage payments.
What home warranty insurance is not
Not everyday cover
icare says the HBCF is not an everyday building warranty: delays, disagreements and unfinished work are not covered while the builder is still trading and able to resolve them. It also excludes wear and tear, maintenance, changes of mind about design or materials, and work by unlicensed builders.
Not home and contents
The QBCC points out that home warranty insurance covers the building process, stays with the property if it is sold, and is not home and contents insurance. If you are renovating or extending, NSW suggests telling your home insurer in writing before work begins, because sometimes you may not be covered at all if you do not.