# Builders warranty insurance by state: thresholds, cover and how long it lasts

*Digital Pages Editorial · 2026-09-07*

Victoria replaced its builders warranty scheme on 1 July 2026, lifting the trigger from $16,000 to $20,000 and the cap from $300,000 to $400,000, and every other state runs a different threshold, cap and time limit again. The table below is the short version. The sections after it give the rules that matter when a builder collapses partway through your job, all taken from the regulators' own pages as at September 2026.

Whatever the state calls it, builders warranty insurance is cover the builder must buy in your name before taking a deposit. In most states it is "last resort" cover: it pays only if the builder dies, disappears, becomes insolvent or loses their licence, not while they are still trading and arguing with you. Victoria's new scheme is the exception.

## Builders warranty insurance thresholds and cover by state

| State | Scheme | Contract value trigger | Maximum cover | Defect cover period |
|---|---|---|---|---|
| VIC | Home Warranty (BPC), contracts from 1 July 2026 | Over $20,000 | $400,000 per home | 6 years major, 2 years other |
| NSW | Home Building Compensation Fund (icare) | Over $20,000 | Set by policy | 6 years major, 2 years other |
| QLD | Queensland Home Warranty Scheme (QBCC) | Over $3,300 | $200,000, or $300,000 with optional cover | 6 years 6 months structural, 6 months non-structural |
| WA | Home indemnity insurance | Over $20,000 | $200,000 plus $40,000 lost deposit | 6 years from practical completion |
| SA | Building indemnity insurance | $20,000 or more, council-approved work | Set by policy | 5 years for defects |
| TAS | No mandatory scheme in force; Financial Assistance Package | Residential building contract | $200,000 | Statutory warranties 6 years |
| ACT | Residential building work insurance or fidelity certificate | Over $12,000 | $200,000 completed work, $10,000 deposit | Not stated on regulator page |
| NT | Fidelity fund certificate (Fidelity Fund NT) | Over $25,000 | Set by certificate | 6 years structural, 1 year non-structural |

## Victoria: Home Warranty replaced Domestic Building Insurance on 1 July 2026

Which Victorian scheme covers you depends on when the contract was signed. Contracts signed before 1 July 2026 sit under Domestic Building Insurance (DBI), which applied to work over $16,000, paid up to $300,000, and only responded if the builder died, disappeared or became insolvent. Those DBI certificates keep running on their original terms and do not transfer.

Eligible contracts signed on or after 1 July 2026 come under Home Warranty, run solely by the Building and Plumbing Commission (BPC). It applies to domestic building work over $20,000 on homes up to three storeys, with a maximum of $400,000 in total per home. The big change is scope: Home Warranty can also respond where work is incomplete, defective or non-compliant and the builder fails or refuses to fix it, so you are not waiting for an insolvency before you can claim.

Major defects, which BPC lists as structural, waterproofing and weatherproofing defects, are covered for up to 6 years after completion. Other defects and non-compliant work are covered for up to 2 years. Incomplete work is capped at 30 per cent of the contract price including agreed variations, accommodation and storage at $12,000, and securing an abandoned site at $5,000. The builder must pay the premium within 10 business days of signing or before starting, whichever is earlier, and BPC then issues you a Notice of Cover. Because it is a statutory scheme, an eligible homeowner can still be protected if the builder never paid.

## New South Wales: Home Building Compensation Fund

NSW cover is icare's Home Building Compensation Fund (HBCF), required by law for most residential building work worth more than $20,000. The builder must give you a certificate of insurance naming your property before work starts and before you pay anything under the contract, including the deposit. If money changes hands or work begins without that certificate, a later claim can be refused.

HBCF is strictly last resort. It responds only if the builder becomes insolvent, dies, disappears, or has their licence suspended for ignoring a money order from NCAT or a court. While the builder is trading you are expected to use the builder and the dispute process first. Cover periods are up to 6 years for major defects, up to 2 years for other defects, and up to 12 months for work that stopped or never started, and the cover stays with the property for future owners. These match the statutory warranties in the Home Building Act, 6 years major and 2 years other, that apply whether or not the contract mentions them. NSW also caps the deposit at 10 per cent of the contract price.

## Queensland: the lowest trigger in the country

Queensland's threshold is $3,300 including materials, labour and GST, so most bathroom and kitchen jobs are caught, not just new builds. The contractor pays the QBCC premium, collects it from you inside the contract price, and must pay it before work begins. If a quote over $3,300 does not show the premium, ask why before comparing it with the others.

Cover runs for 6 years and 6 months from the earliest of the contract date, the premium payment or the start of work, extendable by 6 months if the job took longer than 6 months. Structural defects are covered if you become aware of them within that window and claim within 3 months of noticing. Non-structural defects must be noticed within 6 months of the work being substantially complete. The policy pays up to $200,000 per category of loss, rising to $300,000 if you buy optional additional cover. One trap: only a fixed-price contract lets you claim for non-completion, because QBCC needs a known final price to work out the loss. A cost-plus contract limits you to defective work claims.

## Western Australia: home indemnity insurance

WA requires home indemnity insurance (HII) for residential building work over $20,000, and the builder must hold the certificate before claiming any payment or starting work. It responds to a "relevant circumstance", which means the builder has died, disappeared or become insolvent, or their registration was cancelled or not renewed for failing financial requirements. It does not respond to ordinary defect disputes with a trading builder.

The policy covers completion of the work up to $200,000, and that same limit includes defective work claims made up to 6 years from practical completion. Loss of deposit is covered separately up to $40,000, and the insurer can apply a $500 excess. Owner-builders must take out HII if they sell within 7 years of the building permit, which is the only 7 year figure in any Australian scheme.

## South Australia: building indemnity insurance

SA's building indemnity insurance is required for domestic building work that needs council approval and costs $20,000 or more. The trigger rose from $12,000 on 10 November 2025, so older guides are out of date. The builder arranges and pays for it, and work cannot start until both you and the council hold a copy of the certificate. It protects you and future owners if the builder dies, disappears or becomes insolvent, for both unfinished work and defective work, and defect claims can usually be made up to 5 years from completion. If you are owner-building you cannot buy it.

## Tasmania, the ACT and the Northern Territory

**Tasmania** does not yet have a mandatory home warranty insurance scheme operating. The Residential Building (Home Warranty Insurance Amendments) Act 2023 commences on proclamation, and as at September 2026 CBOS still describes home warranty insurance as a "future" model being developed. In the meantime the Financial Assistance Package pays homeowners whose builder died, disappeared or became insolvent since 1 July 2021: up to 5 per cent of the contract value if work had not started, 20 per cent if it had, capped at $200,000. Statutory warranties on residential building work last 6 years from practical completion.

**ACT** work over $12,000 on residential buildings up to three storeys must have residential building work insurance, currently only offered by QBE, or a fidelity certificate from the Master Builders Fidelity Fund. The builder must have it before the certifier issues a building commencement notice. The maximum you can claim is currently $200,000 for completed work and $10,000 for a lost deposit, which is why the ACT regulator suggests keeping the deposit near that figure. From 1 January 2025 the minimum insurance amount rose from $85,000 to $200,000 and the claim window from 90 to 180 days.

**Northern Territory** cover comes as a fidelity fund certificate from Fidelity Fund NT, the only provider. For certificates issued after 30 March 2026 the trigger rose from $12,000 to $25,000 of prescribed residential building work. The builder needs the certificate before the building permit and before demanding payment. It covers rectification if the builder is bankrupt, dies, disappears or is deregistered: non-structural defects in the first year after completion, structural defects for 6 years.

## Before you pay a deposit

Ask for the certificate, notice of cover or fidelity certificate for your specific address and check the builder's name and licence number on it match the contract. If the builder cannot produce it, do not pay. Verify the licence itself against the state register using our guide to [checking a builder's licence in every state](/kb/builder-licence-check-by-state), and read the contract rules, deposit caps and cooling-off periods in [domestic building contracts by state](/kb/domestic-building-contracts) before signing. When you are still shortlisting, browse [licensed home builders on Digital Pages](/home-builders).

## FAQ
**How long does builders warranty insurance last in Victoria?**

Under Home Warranty, which applies to eligible contracts signed on or after 1 July 2026, major defects such as structural, waterproofing and weatherproofing defects are covered for up to 6 years after the work is completed, and other defects for up to 2 years. Older Domestic Building Insurance policies keep the same 6 year structural and 2 year non-structural split.

**Is there a 7 year builders warranty in Australia?**

No state scheme runs for 7 years. Structural or major defect cover is 6 years from completion in NSW, Victoria, WA and the NT, 6 years and 6 months from cover starting in Queensland, and 5 years in South Australia. The only 7 year figure on a regulator page is WA's rule that owner-builders must take out home indemnity insurance if they sell within 7 years of the building permit.

**How much does builders warranty insurance cost?**

The builder pays the premium and passes it on inside the contract price, so it shows up as a line in the quote rather than a bill to you. Queensland's premium is set on the insurable value of the work, and Victoria's Home Warranty premium is due within 10 business days of signing or before work starts, whichever comes first. No regulator publishes a single flat figure, so compare the insurance line across quotes.

**What are the builders warranty insurance requirements in NSW?**

Residential building work worth more than $20,000 must be covered by icare's Home Building Compensation Fund, and the builder must hand you a certificate of insurance for your property before work starts or any money, including the deposit, changes hands. Cover runs up to 6 years for major defects, 2 years for other defects, and 12 months for work that stopped or never started.

## Sources
- [Building and Plumbing Commission (VIC) — Domestic Building Insurance and Home Warranty](https://www.bpc.vic.gov.au/home-owners/insurance-for-domestic-building-work/domestic-building-insurance-and-home-warranty)
- [Building and Plumbing Commission (VIC) — What Home Warranty may cover](https://www.bpc.vic.gov.au/home-owners/insurance-for-domestic-building-work/what-home-warranty-may-cover)
- [Building and Plumbing Commission (VIC) — Home Warranty premium and Notice of Cover](https://www.bpc.vic.gov.au/home-owners/insurance-for-domestic-building-work/home-warranty-premium-and-notice-of-cover)
- [icare — What is icare HBCF and why do I need it?](https://www.icare.nsw.gov.au/builders-and-homeowners/homeowners/what-is-icare-hbcf)
- [NSW Government — Contracts for residential building work](https://www.nsw.gov.au/housing-and-construction/building-or-renovating-a-home/preparing/contracts)
- [QBCC — What is home warranty insurance](https://www.qbcc.qld.gov.au/home-owner-hub/queensland-home-warranty-scheme/what-home-warranty-insurance)
- [QBCC — Time limits for cover and claims](https://www.qbcc.qld.gov.au/home-owner-hub/queensland-home-warranty-scheme/time-limits-cover-claims)
- [QBCC — Maximum amounts covered](https://www.qbcc.qld.gov.au/home-owner-hub/queensland-home-warranty-scheme/maximum-amounts-covered)
- [WA Government — Home indemnity insurance fact sheet](https://www.wa.gov.au/government/publications/home-indemnity-insurance-fact-sheet)
- [SA.GOV.AU — Building indemnity insurance](https://www.sa.gov.au/topics/housing/buying-building-selling/building-a-home/building-indemnity-insurance)
- [CBOS Tasmania — Financial Assistance Package for consumers affected by construction company failures](https://www.cbos.tas.gov.au/topics/housing/buying-selling-property/financial-assistance-package-for-consumers-affected-by-construction-failures)
- [ACT Planning — Residential building work insurance](https://www.planning.act.gov.au/community/build-or-renovate/before-you-start/building-contracts/residential-building-work-insurance)
- [ACT Planning — Hiring a builder](https://www.planning.act.gov.au/community/build-or-renovate/before-you-start/building-contracts/hiring-a-builder)
- [NT Government — Fidelity fund certificate](https://nt.gov.au/property/building/build-or-renovate-your-home/residential-building-insurance/fidelity-fund-certificate)