Building a home is meant to be one of the most rewarding experiences of your life. It’s where savings, ideas, and emotions come together to create something meaningful – a place to live, grow, and feel safe. But sometimes, the process doesn’t go to plan. Defective work, delays, or even a builder who walks off the job can quickly turn that dream into a stressful and costly mess.
That’s where home warranty insurance steps in.
What Is Home Warranty Insurance?
Home warranty insurance (formally known as domestic building insurance) is a mandatory insurance policy in Victoria for most residential building projects valued over $16,000. It’s taken out by your builder before starting work and is designed to protect you – the homeowner – if things go wrong and the builder can’t fix it.
This insurance is not about minor inconveniences. It’s a last-resort safety net that kicks in if your builder:
- Becomes insolvent
- Dies
- Disappears or is otherwise unable to complete or fix defective work
When any of these happen, you may be eligible to make a claim under the policy to help cover the cost of repairs or unfinished work.
Why It Matters
In the ideal world, you’d never need to rely on this kind of insurance. But the reality is that construction issues happen more often than most people think.
Defects in building work might show up shortly after completion or take months to appear. Sometimes they’re minor, like cracked plaster or loose tiles. Other times, they’re more serious – faulty waterproofing, unstable structures, or electrical faults that pose safety risks.
If your builder is still around, you may be able to resolve these issues directly. But if they’ve vanished or can’t afford to make things right, home warranty insurance can make all the difference in recovering the costs and getting the work fixed.
How Long Are You Protected?
One of the key features of home warranty insurance is that it covers:
- Major structural defects for up to six years
- Non-structural defects for up to two years
The protection period usually begins from the date the work is completed or from the end of your building contract.
What Happens If You Need to Make a Claim?
Claims used to be managed by the Victorian Managed Insurance Authority (VMIA), however recently in July 1st, 2025, this body was integrated into the new Building and Plumbing Commission (BPC), which now oversees the scheme. If eligible, the insurance may cover the cost of hiring someone else to finish the job or fix defective work, even if your original builder is long gone.
The claims process can take time and may require supporting documents, quotes, and inspections – so acting early is important. And if your claim is denied, there are legal avenues to challenge that decision through VCAT (but deadlines apply).
Protecting Homeowners When It Matters Most
Home warranty insurance isn’t something most homeowners think about until they need it. But when they do, it can be a financial and emotional lifesaver. It’s there to support you when you’ve done everything right but are left picking up the pieces due to circumstances beyond your control.
At Warlows Legal, we’ve helped many clients who have been blindsided by defective work or disappearing builders. We can guide you through your options and help you make a claim if home warranty insurance applies to your situation.
Has Your Builder Gone Quiet?
If your home build has been left incomplete or full of faults and you’re not sure where to turn, contact Warlows Legal. Our team can help you understand whether home warranty insurance applies to your situation and support you in getting the compensation or repairs you deserve.
A new home warranty insurance scheme is expected to be introduced in late 2025 under proposed reforms to Victoria’s building legislation. This may bring changes to how coverage is structured and accessed – so stay tuned as more details are released, and read our analysis of it here:
Finally, Real Protection for Homeowners in Low-Rise Buildings
Victoria Strengthens Insurance Rights for High-Rise Apartment Owners
