Guide
Home warranty insurance
Home warranty insurance, also called builders warranty or home building compensation, protects the homeowner if a builder dies, disappears or becomes insolvent before finishing or fixing the work. Every state runs it differently. Here are the thresholds, who pays, and how it fits with a builder’s other covers.
- Thresholds for NSW, Queensland, Victoria, SA and WA
- Who must take it out and when
- It isn’t public liability or contract works
What is home warranty insurance?
Home warranty insurance is a compulsory, state-run cover on residential building work above a dollar threshold. The builder takes it out before starting the job or taking a deposit, and the homeowner is the one who claims. It pays to complete or fix the work when the builder has died, disappeared or become insolvent, and in some states when a licence has been suspended. It is a last-resort cover, not a general guarantee of quality.
Each state has its own name, scheme and threshold. The table below uses the figures each regulator published, and the thresholds change, so check your state’s page before you quote a job.
Home warranty thresholds by state
| State | Scheme | Required when | Who takes it out |
|---|---|---|---|
| NSW | Home Building Compensation Fund (icare HBCF) | Residential building work over $20,000 | The licensed contractor, before starting work or taking a deposit |
| Queensland | Queensland Home Warranty Scheme (QBCC) | Residential construction work over $3,300 | The licensed contractor pays the premium to QBCC |
| Victoria | Home Warranty (Building and Plumbing Commission), which replaced domestic building insurance | Contracts over $20,000 signed from 1 July 2026 | The registered builder |
| South Australia | Building indemnity insurance | Domestic building work costing $20,000 or more that needs council approval (raised from $12,000 on 10 November 2025) | The builder, before work starts |
| Western Australia | Home indemnity insurance | Residential building work over $20,000 | The registered builder |
| ACT | Residential building insurance or a fidelity fund certificate | Residential building work of $12,000 or more | The builder, before work starts |
| Northern Territory | Fidelity fund certificate | Prescribed residential building work over $25,000, for certificates issued after 30 March 2026 (it was $12,000) | The registered builder |
| Tasmania | Home warranty insurance, legislated in 2023 | Check with Consumer Affairs Tasmania or Building Standards Tasmania whether the scheme has started | Check before you sign a contract |
Owner-builders can’t buy this cover for their own work in NSW or Queensland, and other rules apply when an owner-built home is sold. See our owner-builder page.
What it covers, and what it doesn’t
Usually covered
- Incomplete work when the builder dies, disappears or becomes insolvent.
- Defective work discovered after the builder can no longer fix it, within the scheme’s time limits.
- Loss of deposit, in some schemes, up to a capped amount.
- Up to the scheme’s limit per contract, which differs by state.
Usually not covered
- Defects while the builder is still trading. You pursue the builder first.
- Injury or damage to other people. That’s public liability.
- Storm, fire or theft during the build. That’s contract works.
- Work under the threshold, or work the scheme excludes, such as some commercial jobs.
What it means for builders
The home warranty premium is a cost of every residential job above the threshold, and in NSW and Queensland you can’t start or take a deposit without it. It sits alongside the covers you choose: public liability for injury and property damage, contract works for the build itself while it’s under way, and tools and vehicle cover for your gear.
Eligibility matters. Schemes assess a builder’s financial position before granting cover, so a builder who can’t get home warranty eligibility can’t contract for residential work above the threshold in those states.
How to compare a builder’s other covers
Home warranty insurance questions
Is home warranty insurance compulsory?
Yes, for residential building work above your state’s threshold: over $20,000 in NSW, WA and South Australia, over $3,300 in Queensland, and over $20,000 in Victoria for contracts signed from 1 July 2026.
Who pays for home warranty insurance?
The builder takes it out and usually passes the premium on in the contract price. The homeowner is the one who claims on it.
Is builders warranty the same as home warranty insurance?
Yes. Builders warranty, home building compensation, domestic building insurance, building indemnity insurance and home indemnity insurance are the state names for the same kind of cover.
Does home warranty insurance cover bad workmanship?
Only when the builder has died, disappeared or become insolvent, and within the scheme’s time limits. While the builder is trading, you pursue them directly, through your state’s building regulator if needed.
Can an owner-builder get home warranty insurance?
Not for their own work in NSW or Queensland. Contractors an owner-builder engages must provide it for contracts above the threshold.
Keep reading
More guides
Sources
- Service NSW: Home Building Compensation Fund (HBCF)
- QBCC: Who pays home warranty and when
- Victorian Government: Home Warranty insurance
- SA Government: Building indemnity insurance
- WA Government: Home indemnity insurance fact sheet
- NSW Government: Working as an owner-builder
- QBCC: About owner-building
- business.gov.au: Types of business insurance
- ACT Planning: Statutory warranties
- NT Government: Fidelity fund certificate
- Tasmanian legislation: Residential Building (Home Warranty Insurance Amendments) Act 2023
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