Who pays home warranty and when

What work requires a policy

Contractors must take out home warranty insurance on the owner's behalf for all insurable residential construction work where the value of work is more than $3,300 (including cost of materials even if you did not provide them, labour and GST).

Home warranty insurance must be taken out for both building and renovating homes, as well as the installation of new residential swimming pools. It does not apply for commercial projects or residential buildings higher than 3 storeys above a car park.

Check our definition of residential construction work for more information, and find out if your project needs home warranty in our A-Z guide of insurable work.

Who pays the premium

The licensed contractor who contracts with the home owner to carry out the work (often called the principal contractor) must:

• collect the premium from the owner
• pay it to the QBCC on behalf of the owner.

Depending on the type of residential construction work being carried out, a principal contractor could be a:

• builder (e.g. constructing a house)
• trade contractor (e.g. a carpenter installing new kitchen cabinets).  

If you are a subcontractor to a principal contractor then you will not need to pay a premium. The principal contractor will lodge one premium covering all work under the contract with the home owner.

Contracting to an owner builder

A premium is also not payable for work being performed for an owner builder who has a permit for the work. 

If the owner builder does not have a permit for the work you may have to pay a premium for any work you do for them.

Before you start, check:

• the owner has an owner builder permit
• the permit covers the work in question.

When the premium should be paid

You must pay the premium before the earlier of either:

• before work starts; or
• •within 10 business days of signing the contract

Include the premium in the deposit

Note that any deposits can only be up to the maximum allowable by law, and should include the cost of the insurance premium as part of the deposit.

When cover starts

Insurance cover through the Queensland Home Warranty Scheme starts from the date (whichever is earlier):

• the premium is paid
• the contract is signed
• work starts.