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Building insurance and warranty schemes by state

From Modular Living Australia — the independent knowledge base Last updated: 8 Oct 2026

Every Australian jurisdiction except Tasmania requires the builder to take out statutory home warranty insurance or a fidelity certificate for the homeowner once residential work passes a set value: A$20,000 in New South Wales, Victoria, Western Australia and South Australia, A$12,000 in the ACT and the Northern Territory, and A$3,300 in Queensland.^{[1][2][3][4][5][6][7][8]} Maximum cover is A$200,000 in most jurisdictions (for non-structural defects in New South Wales), A$250,000 in South Australia and A$400,000 under Victoria's Home Warranty, which replaced Domestic Building Insurance on 1 July 2026.^{[1][2][3][4][5][7][8]}

Every Australian jurisdiction except Tasmania requires a builder to take out a statutory insurance or fidelity certificate on the homeowner's behalf before a residential building contract above a set value can proceed. The name, the threshold and the coverage cap are different in every state, and the schemes have been changing rapidly — Victoria's scheme was rebuilt entirely from 1 July 2026.

This is last-resort cover. Every scheme on this page responds only once the builder can no longer meet their obligations — through death, disappearance, insolvency or licence loss — not for ordinary defects disputes while the builder is still trading and able to fix them.^[1] Victoria's new scheme is a partial exception, described below.

Why this matters more for off-site builds §

The trigger events these schemes cover — insolvency, disappearance, licence cancellation — are exactly the risks that concentrate around a builder's factory rather than your block. Construction industry insolvencies remain a live risk: the most recent ASIC data shows 3,435 construction companies entered external administration nationally in 2025-26, with NSW and Victoria together accounting for roughly 73% of the total.^[9] If a builder holding your part-built modules in a factory collapses, whether and how much you recover depends entirely on which state's scheme applies and what stage your contract had reached. See what happens if your builder becomes insolvent.

State and territory comparison §

New South Wales — Home Building Compensation Fund (HBCF) §

HBCF cover, administered by icare, is required for most residential building projects over $20,000 including GST.^[1] It is a last-resort scheme: while a builder is still operating, homeowners are expected to pursue disputes directly or through NCAT, and a claim can only be made in limited circumstances — the builder's death, disappearance, insolvency, licence suspension or cancellation, or failure to commence work within the contracted timeframe.^[1] Cover extends to major defects for up to six years from completion, and other defects for up to two years.^[1]

Victoria — Home Warranty (replacing DBI from 1 July 2026) §

Victoria's scheme changed fundamentally on 1 July 2026. Domestic Building Insurance (DBI) — which only responded if the builder died, disappeared or became insolvent — was replaced from that date by a new scheme called Home Warranty, administered exclusively by the Building and Plumbing Commission (BPC), with the private domestic building insurance market closed from the same date.^[2]

The practical change is significant: under Home Warranty, a homeowner is also covered where work is incomplete, defective or non-compliant and the builder is unable or unwilling to fix it — even if the builder is still trading. The maximum cover available is $400,000.^[2] The threshold is $20,000, and cover applies to domestic building projects up to three storeys.^[2] Any DBI policy issued before 1 July 2026 continues under its original terms.^[2]

Because the scheme is new, confirm current administrative detail — including exact defect-cover periods and claim processes — directly with the BPC rather than relying on older DBI-era guidance still circulating online. See Home Warranty replaces domestic building insurance in Victoria.

Queensland — Queensland Home Warranty Scheme §

Queensland runs the lowest threshold in the country and, uniquely, the scheme is administered directly by the regulator rather than a private insurer. Most residential building work over $3,300 including materials, labour and GST must be covered.^[3] The scheme pays a maximum of $200,000 for refunding a deposit or completing incomplete work, and a separate maximum of $200,000 for defects and subsidence discovered after completion.^[3] Structural defects are covered for six years and six months from completion; non-structural defects for six months.^[3] Buildings over three storeys — excluding a storey used mainly as a carpark — fall outside the scheme.^[3]

Western Australia — Home Indemnity Insurance (HII) §

WA's Home Building Contracts Act 1991 requires a builder to take out HII in the owner's name before accepting payment or commencing work valued over $20,000.^[4] HII covers the homeowner and subsequent owners for faulty, unsatisfactory or incomplete work, and loss of deposit, if the builder dies, disappears or becomes insolvent, for six years from practical completion.^[4] Reforms applying to certificates issued on or after 1 June 2020 doubled the maximum payouts to $40,000 for a lost deposit and $200,000 for incomplete or defective work.^[4]

South Australia — Building Indemnity Insurance (BII) §

SA's threshold and coverage both increased recently. From 10 November 2025 the threshold rose from $12,000 to $20,000, and the policy limit rose from $150,000 to $250,000 for new policies.^[5] BII must be taken out on any building project requiring council development approval and valued at $20,000 or more, before work commences.^[5] It protects the homeowner if the builder becomes insolvent, disappears or dies, and covers defects for up to five years from completion.^[5] Unusually, an SA owner-builder cannot take out BII themselves — the policy can only be held by someone with a builder's licence.^[5] See owner-builder permits by state for how SA's owner-builder framework differs from other states.

Tasmania — no mandatory scheme currently §

Tasmania abolished its compulsory housing indemnity insurance scheme in 2008 and, as of this guide's publication, has not reinstated one. Consumers rely instead on the statutory warranties in the Building Act 2016 and the Residential Building Work Contracts and Dispute Resolution Act 2016.^[6] A reintroduction has been legislated — the Residential Building (Home Warranty Insurance Amendments) Act 2023 was passed and would apply to contracts over $20,000 — but its operating provisions commence only on a date yet to be proclaimed, so the scheme is not yet in force.^[6]

In the interim, the Tasmanian Government has established a Financial Assistance Package specifically for consumers affected by construction company failures, intended to approximate the protection the future scheme will provide.^[6] If you are building in Tasmania, this gap is worth raising directly with your builder and, if using one, your lender.

Australian Capital Territory — Fidelity Fund Certificate §

The ACT requires either a residential building insurance policy or a Fidelity Fund Certificate for building work up to three storeys valued at $12,000 or more.^[7] For certificates issued on or after 1 January 2025, the maximum claim is $200,000 — up from $85,000 for older certificates — with a 180-day window to lodge a claim, and cover runs for a minimum of five years after the commencement notice is issued.^[7] Notably, ACT owner-builders are not required to obtain a Fidelity Fund Certificate on their own home, since the scheme exists to protect a buyer from a builder they engaged — not an owner building for themselves.^[7]

Northern Territory — Fidelity Fund NT §

The NT requires a Fidelity Fund NT Certificate for every new house, unit up to three storeys, or extension valued over $12,000, obtained before a building permit can be issued or payment demanded.^[8] Cover responds if the builder becomes bankrupt, dies, disappears or has their registration cancelled, addressing both non-completion (funding a new builder) and non-compliance (defects) — capped at 20% of the contract price up to a combined $200,000 across both.^[8] Unlike the ACT, the NT scheme also requires owner-builders to obtain a certificate, specifically to protect future owners if the property is later sold.^[8]

What to check before signing §

1. Ask for the certificate of insurance or fidelity certificate before paying a deposit or signing — in most states this is a legal requirement, not a courtesy.
2. Confirm the certificate names your specific project, builder and contract value — a generic company-level certificate is not the same thing.
3. Check the current threshold and cap for your state directly with the scheme administrator, since several have changed in the past 18 months.
4. If building in Tasmania, ask your builder in writing what protection — if any — applies if they become unable to complete the work.

What is not covered here §

This page does not cover premiums, claim procedures, exemptions for particular types of work, or how each scheme treats off-site manufacturing specifically. Thresholds, caps and cover periods change; confirm current figures with the scheme administrator in your state or territory before relying on them.

Related guides §

• What happens if your builder becomes insolvent
• Home Warranty replaces domestic building insurance in Victoria
• Progress payments and off-site construction
• Owner-builder permits by state
• Glossary

References §