Home warranty insurance explained

Most residential building work done in Queensland valued over $3,300 (including labour and materials) must have home warranty insurance.

As part of the building process, the contractor pays a premium to us to insure the construction. The amount is included as part of your contract, and is paid before work begins.

It may protect you where:

• a licensed contractor does not complete the contracted residential construction work and you have terminated the contract
• the contractor fails to rectify defective work
• the building suffers from subsidence or settlement.

If we pay out on a claim, we pursue the contractor to recover the claim amount.

Which cover is applicable?

• Insurance Policy Conditions Edition 7 applies to contracts signed between 29 September 2006 and 30 June 2009.
• Insurance Policy Conditions Edition 8 applies to contracts signed between 1 July 2009 and 27 October 2016.
• Queensland Building and Construction Commission Regulation 2018, Schedule 6 applies to contracts signed on or after 28 October 2016.
• Queensland Home Warranty Scheme Product Disclosure applies to contracts signed on or after 28 October 2016. For a summary of the cover see Queensland Home Warranty Scheme Product Disclosure (PDF).

Types of work we insure

• construction of a new home, related roofed building (e.g. a garage), townhouse or multiple unit dwelling (no more than 3 storeys)
• the extension, addition, alteration, renovation or repair of any of the above buildings
• replacement or refit of fixtures or fittings in a kitchen or bathroom
• work on a deck or verandah, attached to a residence
• building work that affects the structural integrity of the building

From 28 October 2016, in addition to the above, the following work is also covered:

• work on or in the home or related roofed building (e.g. painting)
• work on a deck or verandah attached to a home or a related roofed building
• anything attached to the home or related roofed building and which requires building or plumbing approval
• any structure attached to the external part of a home or related roofed building which has no other supporting structure (e.g. awning, handrail)
• stairs or ramp which provide access, and are permanently attached to the home or related roofed building
• swimming pools.

The examples below do not require insurance if done on their own:

• driveways, paths or roads
• fences.

Make sure you have a contract

It’s important to have a signed contract with your contractor. Apart from being a legal requirement, it ensures that you have access to the full range of benefits under the Queensland Home Warranty Scheme.

Get a fixed price for the work so you can ensure the project does not exceed your budget. Having a fixed-price contract also provides peace of mind so that if something goes wrong and your contractor does not finish the job, you can make a claim for completion of the work. If a contractor defaults on an obligation to finish a fixed price contract, you may be entitled to compensation for the extra cost to complete the work, above the fixed cost.

Avoid cost-plus contracts and construction management contracts which can lead to cost blow-outs if not managed properly. These contracts will not entitle you to a claim if the works are left incomplete because there is no fixed cost for the work and you pay as you go, so if managed properly you should not suffer a loss in the event the work is not completed.

Multiple dwellings or one or more contracts to build three or more living units

The Queensland Home Warranty Scheme assists homeowners, not those involved in commercial ventures. No assistance is provided to a person who enters into one or more contracts, in force at the same time, to construct three or more dwellings or living units. Assistance is available to a subsequent purchaser of a dwelling or unit.

How long does a home warranty insurance policy last?

The work is covered for a period of 6 years 6 months from the date (whichever is earlier):

• the premium is paid
• a contract is entered, or
• work is commenced

The period of cover is extended where the work takes longer than 6 months to complete. 

Time limits for making a claim

For non-completion of work claims, the contract must end within two years of the day work starts and you must make your claim with the QBCC within three months after the date the contract ends.

For defective work claims, structural defects are covered for six years six months from the date (whichever is the earlier) of payment of the premium, a contract is entered or work is commenced and you must lodge the claim within three months of noticing the defect.

Non-structural defects are covered if you become aware of the defect within six months after the day the work is completed and you must lodge the claim within seven months of the completion date.

Checking for insurance cover

If you have signed a contract for residential construction work, we send you a notice of cover, which provides details of the work, the builder and the premium paid. You should get this before the work begins.

To check, contact us with the property details (e.g. address, lot and plan number).

Note: If you are a subsequent owner of the property, you can search to see if the property has cover under the Queensland Home Warranty Scheme. The search can be done online by registering with myQBCC or you can complete the Insurance Search Request form (PDF).