What is Domestic Building Insurance?

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Domestic building insurance, previously called ‘builder’s warranty insurance’ is the insurance provided by your builder for works that exceed $16,000 (for both labour and materials) in value.

It’s compulsory under relevant building legislation in most states for builders carrying out residential building work.

It is your builder’s responsibility to obtain this insurance on your behalf, and a copy of this insurance must be provided to you before you sign a contract or pay any money.

What does it cover?

Domestic building insurance, while taken out by your builder, is a protection for you as the client. It covers the current homeowner and any subsequent owners, if, before work is complete, your builder dies, goes broke, disappears or (in some cases) has failed to respond to a rectification order within 30 days of it being issued.

The insurance lasts up to 6 years either from the time the building work has finished or from when a building contract is terminated.

It covers costs up to $300,000 to fix structural defects for six years, and non-structural defects for two years.

In all other cases, it is up to you to fix or complete works, or to pay any costs awarded.

Are There Any Exceptions?

 As a rule, domestic building insurance is not required for multi-storey residential buildings containing three or more stories dedicated to accommodation (this can include a foyer and storage area, even if the rest of the floor is a car park).

What If I’m An Owner Builder?

If you sell your property within six years and six months of completing your building work, you are required by law to provide an owner builder defects (137b) report for all work – regardless of value. The report must not be more than six months old.

You also need to take out domestic building insurance for works over $16,000 as protection for the property’s new owner. Your builder should provide you with their insurance, but you will also need your own insurance for any work you carried out as an owner builder.

An insurance provider will ask for a current owner builder defects report and domestic building insurance certificates given to you by builders or tradespeople who worked on your project.

It’s important to note that domestic building insurance does not cover defects or incomplete work identified in an owner builder defects inspection report.

Why is an Owner Builder Defects Report with The Home Inspection Hub so important?

  • An Owner Builder Defects Report can only be provided by a prescribed practitioner. At The Home Inspection Hub, we have a number of suitably qualified inspectors who can inspect your renovation work and prepare the 137B Report.
  • We prepare the report on our custom-built iPad inspection app and can send the report straight to your conveyancer if required.
  • The 137B Report will enable you to obtain domestic building insurance which is required for any domestic work with trade value over $16,000.
  • Under the Building Act, it is an offence to sell your property within the 6.5 year timeframe without a Defects Report and domestic building insurance. Heavy penalties apply for non-compliance.
  • In addition, if you fail to provide an owner builder defects report, the purchaser has the right to pull out of the sale agreement without incurring penalties.

Give us a call on 1300 071 283 , email info@thehomeinspectionhub.com.au or submit a free online quote so we can simplify the process and help you prepare for the sale of your home.