Domestic building insurance in Victoria changed on 1 July 2026. For eligible contracts signed on or after that date, the old domestic building insurance (DBI) has been replaced by Home Warranty, provided by the Building and Plumbing Commission (BPC), and the threshold has risen from work valued over $16,000 to work valued at more than $20,000. Just as important, Home Warranty is designed to help when a problem is first identified and the builder won’t fix it, not only as a last resort after the builder has died, disappeared or become insolvent.
We’re building surveyors, not insurers, so this guide explains the rules and how they affect your building permit. For questions about your policy or a claim, go to the BPC.
What is domestic building insurance, and who runs it now?
Domestic building insurance protects homeowners when residential building work goes wrong and the builder can’t or won’t put it right. The older DBI scheme, which still applies to earlier contracts, is last-resort cover.
The BPC started on 1 July 2025. It replaced the Victorian Building Authority (VBA) and brought together the functions of Domestic Building Dispute Resolution Victoria (DBDRV) and the domestic building insurance arm of the Victorian Managed Insurance Authority (VMIA). If the name change is new to you, read why the VBA is now the Building and Plumbing Commission.
From 1 July 2026, the BPC provides Home Warranty for new eligible domestic building work. The Victorian Government describes it as the First Resort Home Warranty Scheme, introduced by the Building Legislation Amendment (Buyer Protections) Act 2025 as part of a wider package of Victorian building reforms in 2026. You’ll also see it called home warranty insurance.
What changed for contracts signed from 1 July 2026?
The date your contract was signed decides which scheme applies. Here’s how the two compare, based on the BPC’s DBI and Home Warranty guidance.
| Detail | Domestic building insurance (DBI) | Home Warranty |
|---|---|---|
| Contracts | Signed before 1 July 2026 | Signed on or after 1 July 2026 |
| Value threshold | Work valued over $16,000 | Work valued at more than $20,000 |
| Who provides it | The insurer that issued your policy | The BPC |
| When you can claim | Limited situations, such as the builder dying, disappearing or becoming insolvent | Also when work is unfinished, defective or non-compliant and the builder doesn’t fix it |
| Maximum cover | Up to $300,000 | Up to $400,000 in total per home |
For example, if you signed a contract for a $180,000 rear extension on 10 July 2026, your builder needs to arrange Home Warranty. If you signed the same contract on 20 June 2026, it falls under DBI. Existing DBI policies aren’t converted: they continue on their original terms until they expire.
What does “first resort” mean in practice?
You no longer have to wait until your builder has gone out of business. If work is unfinished, defective or doesn’t comply and the builder won’t fix it, you may be able to claim while they’re still operating. You’ll usually still have to put the problem to the builder in writing first, using a complaint notice, and give them a chance to respond before the BPC assesses the claim.
When is Home Warranty required, and who pays for it?
You need Home Warranty when eligible domestic building work on a home or residential building of up to three storeys is valued at more than $20,000, unless an exclusion applies.
The builder pays the premium for each eligible project, although the cost may be built into your contract price. The premium must be paid within 10 business days after the major domestic building contract is signed, or before work starts if that happens sooner. Not paying it is an offence that can lead to disciplinary action or prosecution.
What paperwork should you receive?
Once the BPC accepts the premium, it issues a Notice of Cover to the building owner confirming your project’s details. Check them, and keep the notice with your contract because you’ll need it for any claim.
Ask your builder when to expect the notice, and contact the BPC if it doesn’t arrive. For DBI contracts signed before 1 July 2026, the builder had to take out cover before asking for or receiving any payment, including a deposit, and give you a copy of the certificate of insurance within seven days of receiving it.
Before you sign, check your builder’s registration. Home Warranty doesn’t cover work by an unregistered builder where registration was required.
What does Home Warranty cover, and for how long?
Home Warranty can cover defective, non-compliant and incomplete work and some related costs, up to $400,000 in total per home, subject to eligibility, limits and exclusions. The main categories are:
- Major defects (structural, waterproofing and weatherproofing defects) – covered for up to 6 years after the work is completed.
- Other defects and non-compliant work – covered for up to 2 years after the work is completed.
- Incomplete work – up to 30% of the total contract price (including agreed variations), claimed within 12 months of the event that triggers the claim.
- Lost deposits – where building work hasn’t started, subject to eligibility and assessment.
- Accommodation, removal and storage costs – up to $12,000, claimed within 28 days of incurring them.
- Securing the building site – up to $5,000.
Defect claims generally have to be lodged within 12 months of when you first knew about the problem, or reasonably should have known. So raise a leak or crack promptly rather than waiting until the cover period is nearly over. Swimming pools can be covered within the same $400,000 limit, with some exclusions such as slides and diving boards.
What isn’t covered?
Exclusions listed by the BPC include:
- work that isn’t in your contract, plans, specifications or agreed variations
- minor cosmetic differences between the finished work and the plans and specifications
- fair wear and tear, vandalism and theft
- defects caused by a lack of maintenance or a failure to minimise damage
- work by an unregistered builder where registration was required
- problems that fall outside the cover or claim periods.
The BPC’s page on Home Warranty time limits and amounts has the full detail.
Owner-builders: do you need insurance to sell?
For owner-builders, insurance becomes an issue when you sell. If you sell within 6 years and 6 months of the date of the occupancy permit or certificate of final inspection, you need:
- a defects inspection report from a prescribed practitioner, no older than six months, whatever the value of the work, and
- domestic building insurance if the work was valued at over $20,000, bought before you enter into a contract of sale.
The Notice of Cover and defects report both go into your section 32 vendor statement. The owner-builder threshold also rose from $16,000 to $20,000 on 1 July 2026, and this cover now comes through the BPC’s scheme. If the disclosure is wrong, the buyer may be able to avoid the contract before settlement. The BPC sets out the steps in selling an owner-built home.
You may still see $16,000 on older council forms and web pages. Planning owner-builder work now? A certificate of consent from the BPC is needed where the work is valued at more than $20,000, and our guide to owner-builder permits explains the process.
How does your building surveyor check domestic building insurance?
Insurance is part of the permit check. Section 24A of the Building Act 1993 requires the relevant building surveyor to check the builder’s insurance before issuing a building permit for domestic building work that a builder will carry out. For DBI contracts, the BPC explains this as confirming that the builder named on the permit is the same builder named on the major domestic building contract and on the certificate of insurance.
For Home Warranty contracts, the Notice of Cover is the BPC document confirming cover for your project. When you apply for a building permit, include your signed contract and the builder’s insurance details, and we’ll confirm if anything else is needed. If cover can’t be confirmed or the names don’t match, the permit can be delayed.
Builders can avoid that delay by arranging Home Warranty promptly after signing. Our role is limited to what the law requires for the permit; we can’t advise on insurance or handle claims.
Frequently asked questions
Do I need insurance for a $15,000 job?
No. Home Warranty applies to eligible work valued at more than $20,000, and a $15,000 job was under the old $16,000 DBI threshold too. If a registered builder’s work costs more than $10,000, though, they must still use a major domestic building contract unless a single trade exemption applies, and the job may still need a building permit.
What if my builder didn’t take out insurance?
Raise it with the builder in writing and contact the BPC promptly. Not paying the Home Warranty premium is an offence that can lead to disciplinary action or prosecution, and your building surveyor must check insurance before issuing a permit for work that needs it.
Does Home Warranty cover owner-builder work?
Home Warranty is for eligible work by registered builders under a contract, so it applies if you engage a registered builder for work valued at more than $20,000. Your own owner-builder work needs insurance if you sell within 6 years and 6 months and it was valued at over $20,000.
My contract was signed in June 2026. Which scheme applies?
DBI, if the work was valued over $16,000. Contracts signed before 1 July 2026 stay under DBI on the original policy terms, and DBI claims go through a separate BPC claims process.
How do I make a claim now?
For Home Warranty, if your builder is still trading you’ll usually need to give them a written complaint notice first, using the BPC’s template and describing the defects with photos. You then lodge a notice of claim with the BPC, with supporting documents such as your contract, plans, payment records, photos and Notice of Cover. You may not need a complaint notice first if, for example, the builder has died, disappeared or become insolvent. Start at the BPC’s Home Warranty claims page.
This article is general information current as of September 2026, not legal or insurance advice. Every project is different – ask us to confirm what applies to yours, and contact the BPC about your cover or a claim.
Planning a new home, extension or renovation with a builder? Our building surveyors can tell you what’s needed before your building permit is issued and give you fast, practical advice. Request a free quote or call JLN on 0422 234 951.