The Queensland Home Warranty Insurance Scheme is designed to safeguard homeowners from potential financial loss due to building defects or contractor failure. Understanding home warranty insurance is vital for both homeowners and builders. By knowing what is and is not covered, you can protect your investment and avoid potential disputes.
What is the Queensland Home Warranty Insurance Scheme?
The Queensland Home Warranty Insurance Scheme is a safety net for homeowners. It is a compulsory insurance policy that covers you if your builder or contractor fails to complete the work or if the building has structural defects. This insurance is funded by premiums paid by licensed contractors on behalf of the consumer.
What does it cover?
Most residential building work valued over $3,300 (including materials, labour and GST) requires home warranty insurance. This includes new homes, extensions, renovations, and repairs. However, it is essential to note that not all building work is covered. For instance, work on buildings with more than three storeys (excluding carpark levels) is not covered.
Who is responsible?
Your builder is responsible for taking out home warranty insurance on your behalf. They must include the cost of insurance in their quote to you. Failing to do so can result in significant penalties.
How long does it last?
Cover for structural defects generally lasts for 6years and 6months from the date of contract. For non-structural work, it is typically around 6 months from the completion of work. It is important to note that these are general timeframes, and specific circumstances may vary.
What work is not covered?
To avoid confusion and unnecessary premiums, it is crucial to understand what work does not require home warranty insurance.
Key areas of work that DO NOT require home warranty insurance are:
- work in and on multiple-unit dwellings that have more than three-storeys, excluding a car park level.
- these buildings are not considered residential construction work and are not covered
- building work on the site of a:
- registered retirement village
- commercial or industrial premises
- work that has had the scope amended and the total value has now fallen below the regulated $3,300 threshold
- work for roofed buildings that are not a residences (e.g. farm sheds or horse arenas).
If you are unsure about whether your project requires insurance, consult the QBCC's detailed A to Z guide of insurable work.
Cost plus contracts
Cost plus contracts can be complex and often lead to misunderstandings about home warranty insurance. The Queensland Building and Construction Commission (QBCC) strongly recommends avoiding these contracts to protect both homeowners and licensees. Learn more about cost plus and construction management contracts.
How to make a claim under Home Warranty Insurance
If your licenced contractor will not or cannot finish the work you contracted them to do, or if they do not fix defects, you may be eligible for a claim under the Queensland Home Warranty Scheme.
You may be able to make a claim if you own a home with an active home warranty insurance policy. The policy is attached to the property, so remains active for a specific time period even if the property is sold. This means you don't have to be the person who originally contracted the building work to make a claim.
Learn more about eligibility requirements and the Queensland Home Warranty Scheme.
Where can I find more information?
The QBCC has developed a series of helpful videos which delve further into home warranty insurance for homeowners. Key topics covered include:
- What is home warranty insurance
- Who pays for home warranty insurance
- Management of your policy
- Consequences of not taking out a policy
You can also download our home warranty insurance fact sheet or read more on What is Home Warranty Insurance.
