Finder makes money from featured partners, but editorial opinions are our own.

Home Warranty Insurance

The builder usually pays for home warranty insurance, but it doesn't always protect you for unfinished jobs.

Homeowners who are left with incomplete or defective construction jobs may be protected by mandatory home warranty insurance in many parts of Australia – but only if the builder has gone missing, passed away, become insolvent or lost their licence.

This type of insurance is purchased by the builder doing the work and has many different names depending on the state you live in.

What is home warranty insurance?

Home warranty insurance is designed to protect homeowners against incomplete building work and defects from construction in residential projects but it only covers you in specific situations. For example, if your builder:

  • Goes missing
  • Dies
  • Becomes insolvent
  • Loses their license

It's taken out by the builders and tradespeople themselves but is only mandatory when the build project reaches a certain value. This differs between states, as does what it's called.

Picture not described

Home warranty insurance in NSW and WA

Home warranty insurance functions largely the same way in both NSW and WA. The main difference is that it's often called "home building compensation" in NSW and "home indemnity insurance" in WA. It can cover you for the completion of building work or fixing defects but only if:

  • The builder is unable to finish the work due to death, financial insolvency or disappearance within six years of finishing the contract.
  • Any builder or tradesperson is required to take out this insurance for each building project over $20,000. Sub-contractors are covered by the head contractor's cover.

Picture not described

Builders warranty insurance in Victoria

Builders warranty insurance is known as "domestic building insurance" in Victoria. It can cover homeowners plus subsequent owners for incomplete or defective building work.

  • Applies if the builder cannot finish due to death, disappearance, financial insolvency within six years of completing the contract, or if the builder fails to comply with a court order to repair substandard work (applicable to contracts signed after 1 July 2015).
  • Builders are only required to take out this insurance for each building project over $16,000.

Picture not described

Home warranty insurance in QLD

In Queensland, home warranty insurance can cover the homeowner for incomplete construction work, defects and subsidence or settlement but:

  • You must make a claim within three months of noticing the defect for structural issues and within seven months of contract completion for non-structural defects.
  • Builders are required to take out this insurance for most residential projects valued above $3,300.

Picture not described

Home warranty insurance in other states like ACT, SA and TAS

Home warranty insurance is mandatory in South Australia, the ACT and the Northern Territories for projects above $12,000 but not in Tasmania. It covers homeowners for incomplete construction and structural defects in a similar way to other states. It can apply if

  • The work has not been completed or faulty work has not been fixed and the builder dies, disappears or is declared bankrupt.
  • Builders are required to take out this insurance for most residential projects valued above $12,000.

Summary of the facts

StateMinimum value of workLength of cover for structural workLength of cover for non-structural workMinimum cover to be provided by insurer
ACT$12,0006 years$85,000
NSW$20,0006 years2 years$340,000
SA$12,0005 years$150,000
VIC$16,0006 years2 years$300,000
WA$20,0006 years$100,000

Pros and cons of home warranty insurance

Pros

  • It can sometimes cover incomplete or defective building work.
  • It can be an effective "last resort" system, where you can claim only if the builder doesn't complete the work due to death, disappearance or financial insolvency.

Cons

  • It's only mandatory on residential building projects that exceed a certain threshold depending on the state.
  • It doesn't protect you from dishonest builders (you generally won't be covered if a builder refuses to repair their work or give you a refund.)
  • In-built cap regardless of the building project (you'll only be covered for a maximum of 20% of the contract price).
  • It won't cover commercial buildings.

Is it time to look at your home insurance?

Whether you're buying your first home insurance policy or looking to switch from your existing one, it always pays to compare. You can choose up to four policies at a time, select "Compare" and view the benefits side-by-side to make sure you get the right cover.

Name Product Finder Rating
Finder AwardBonus
  • Storm
  • Fire
  • Theft
  • Flood
  • Accidental Damage (e.g TV falls)
  • Impact to home (e.g falling trees)
  • Escaped water (e.g burst pipe)
  • Portable contents (e.g dropped laptop outside of home)
  • + more insured events and other features
  • Storm
  • Fire
  • Theft
  • Flood
  • Accidental Damage (e.g TV falls)
  • Impact to home (e.g falling trees)
  • Escaped water (e.g burst pipe)
  • Portable contents (e.g dropped laptop outside of home)
  • + more insured events and other features
4.5/5★★★★★
Our verdict: The most popular insurer on Finder, Budget Direct prioritises low-cost cover and gives you up to 30% off your first year for new combined policies purchased online. This is a big reason it won this year’s Finder Award for value.
Youi Building and Contents Insurance
4.5/5★★★★★
Best Rated Brand
  • Storm
  • Fire
  • Theft
  • Flood
  • Accidental Damage (e.g TV falls)
  • Impact to home (e.g falling trees)
  • Escaped water (e.g burst pipe)
  • Portable contents (e.g dropped laptop outside of home)
  • + more insured events and other features
  • Storm
  • Fire
  • Theft
  • Flood
  • Accidental Damage (e.g TV falls)
  • Impact to home (e.g falling trees)
  • Escaped water (e.g burst pipe)
  • Portable contents (e.g dropped laptop outside of home)
  • + more insured events and other features
4.5/5★★★★★
Our verdict: Finder’s 2022 Insurer of the Year for Customer Satisfaction and our Top Pick for Fire Damage cover. It’s good if you want a tailored quote over the phone.
QBE Home & Contents Insurance
3.5/5★★★★★
Green CompanyBonus
  • Storm
  • Fire
  • Theft
  • Flood
  • Accidental Damage (e.g TV falls)
  • Impact to home (e.g falling trees)
  • Escaped water (e.g burst pipe)
  • Portable contents (e.g dropped laptop outside of home)
  • + more insured events and other features
  • Storm
  • Fire
  • Theft
  • Flood
  • Accidental Damage (e.g TV falls)
  • Impact to home (e.g falling trees)
  • Escaped water (e.g burst pipe)
  • Portable contents (e.g dropped laptop outside of home)
  • + more insured events and other features
3.5/5★★★★★
Our verdict: Finder's Top Pick for Floods plus cover for other common claims such as fire and theft). Its discount is better than most – 20% off your first year with a combined policy.
  • Storm
  • Fire
  • Theft
  • Flood
  • Accidental Damage (e.g TV falls)
  • Impact to home (e.g falling trees)
  • Escaped water (e.g burst pipe)
  • Portable contents (e.g dropped laptop outside of home)
  • + more insured events and other features
  • Storm
  • Fire
  • Theft
  • Flood
  • Accidental Damage (e.g TV falls)
  • Impact to home (e.g falling trees)
  • Escaped water (e.g burst pipe)
  • Portable contents (e.g dropped laptop outside of home)
  • + more insured events and other features
2.5/5★★★★★
Our verdict: A good option if you want a well regarded brand. All come with automatic flood cover and let you pay monthly or fortnightly at no extra cost.
Honey Home & Contents Insurance
4.5/5★★★★★
Finder AwardBonus
  • Storm
  • Fire
  • Theft
  • Flood
  • Accidental Damage (e.g TV falls)
  • Impact to home (e.g falling trees)
  • Escaped water (e.g burst pipe)
  • Portable contents (e.g dropped laptop outside of home)
  • + more insured events and other features
  • Storm
  • Fire
  • Theft
  • Flood
  • Accidental Damage (e.g TV falls)
  • Impact to home (e.g falling trees)
  • Escaped water (e.g burst pipe)
  • Portable contents (e.g dropped laptop outside of home)
  • + more insured events and other features
4.5/5★★★★★
Our verdict: Honey gives you $250 smart sensors to reduce accidents and estimates your rebuild costs for you. Honey was a finalist for the comprehensive category in this year’s Finder Awards.
Bonus
  • Storm
  • Fire
  • Theft
  • Flood
  • Accidental Damage (e.g TV falls)
  • Impact to home (e.g falling trees)
  • Escaped water (e.g burst pipe)
  • Portable contents (e.g dropped laptop outside of home)
  • + more insured events and other features
  • Storm
  • Fire
  • Theft
  • Flood
  • Accidental Damage (e.g TV falls)
  • Impact to home (e.g falling trees)
  • Escaped water (e.g burst pipe)
  • Portable contents (e.g dropped laptop outside of home)
  • + more insured events and other features
3/5★★★★★
Our verdict: Get up to 20% off when you buy a combined home and contents policy. Terms, conditions, underwriting criteria and minimum premiums apply, which may reduce discount. Make sure your rebuild costs are accurate though – Australian Seniors don’t do underinsurance cover.
Kogan Home & Contents Insurance
3/5★★★★★
Bonus
  • Storm
  • Fire
  • Theft
  • Flood
  • Accidental Damage (e.g TV falls)
  • Impact to home (e.g falling trees)
  • Escaped water (e.g burst pipe)
  • Portable contents (e.g dropped laptop outside of home)
  • + more insured events and other features
  • Storm
  • Fire
  • Theft
  • Flood
  • Accidental Damage (e.g TV falls)
  • Impact to home (e.g falling trees)
  • Escaped water (e.g burst pipe)
  • Portable contents (e.g dropped laptop outside of home)
  • + more insured events and other features
3/5★★★★★
Our verdict: Good comprehensive cover (issued by QBE). Also, get 22% off on your first year's premium when you purchase a new combined Home & Contents insurance policy online + $10 monthly credit. T&Cs apply.
loading

Why you can trust Finder's home insurance experts

free

We're free

You pay the same as buying directly from the home insurer. Better still, we regularly run exclusive deals that you won't find on any other site – plus, our tables make it easy to compare policies.
expert advice

We're experts

We've researched and rated dozens of policies as part of our Finder Awards. We provide unique insights and our in-house experts regularly appear on Sunrise, 7News and SBS News.
independent

We're independent

Unlike other comparison sites, we're not owned by an insurer. That means our opinions are our own and we work with lots of home insurance brands, making it easier for you to find a good deal.
help

We're here to help

Since 2014, we've helped 150,000+ people find home insurance by explaining your cover options simply and clearly. We'll never ask for your number or email. We're here to help you make a decision.

Frequently asked questions about home warranty insurance

More guides on Finder

  • Bushfire Statistics Australia

    Stats and facts on bushfires in Australia.

  • Home insurance WA

    Learn about the unique risks that Western Australia faces and how to get home insurance that is right for your circumstances.

  • Flood insurance

    Most home insurers automatically cover floods but make sure you take out cover at least 72 hours before an event.

  • Honey home insurance review

    Honey home insurance is a startup that's doing things a little differently.

  • Laptop insurance

    Here are several contents insurance options that will protect your laptop anywhere you take it.

  • Home fire insurance

    Fire insurance will help you replace your home and everything in it if you lose it all to fire.

  • How much does home insurance cost in Australia?

    Discover what impacts the cost of home insurance and how to get the right protection with this handy guide.

  • Home insurance WA

    Learn about the unique risks that Western Australia faces and how to get home insurance that is right for your circumstances.

  • Bushfire insurance

    Compare policies that cover bushfires, including smoke damage and accommodation due to evacuation.

  • Storm damage insurance

    Protect your home against storm, flood and rainwater damage with the help of this comprehensive guide.

Ask an Expert

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and 6. Finder Group Privacy & Cookies Policy.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
Go to site