Yes: according to the Queensland Building and Construction Commission (QBCC) guidance on home warranty insurance, updated 11 May 2025, home warranty insurance is compulsory for residential construction work valued at more than $3,300, including materials, labour and GST, and it pays up to a maximum of $200,000 on claims. The same guidance says cover lasts 6 years and 6 months from the earliest of contract entry, premium payment or commencement of work. It is not home and contents insurance; figures checked 1 October 2026.
When is home warranty insurance compulsory?
Check both the type of work and its total value:
| Check | QBCC position |
|---|---|
| Project value | Residential construction work valued at more than $3,300 |
| Included in the value | Materials, labour and GST |
| Type of work | Residential construction work only |
| Commercial projects | Not covered by the scheme |
| Common examples | New homes, extensions, renovations and repairs may require cover when the threshold is exceeded |
The QBCC’s homeowner guide, updated 24 Jan 2025, describes the scheme as a compulsory safety net for incomplete work and structural defects. Work in or on multiple-unit dwellings with more than three storeys, excluding a mainly carpark storey, is not considered residential construction work and is not covered by the scheme.
Who arranges and pays for the insurance?
The contractor is responsible for taking out home warranty insurance on the homeowner’s behalf. Under the QBCC guidance:
- The contractor collects the premium from the homeowner and pays it to the scheme.
- The premium must be included in the homeowner’s contract.
- It must be paid before work begins.
- Each quote for a project over the threshold should include the premium so the quotes can be compared accurately.
Contractors must carry out these obligations or face significant penalties. Check that the premium appears in both the quote and the contract before work starts.
Does the contract type change the cover?
Yes. The contract type determines which claim types may be available.
| Contract type | Claim types described by the QBCC |
|---|---|
| Fixed-price residential contract | Non-completion and defective-work claims |
| Cost-plus residential contract | Defective-work claims only |
| Non-completion claim | Requires a fixed-price residential contract with a licensed contractor |
A cost-plus contract has no certain final price, so the QBCC says the scheme cannot quantify whether the homeowner has suffered a loss. The QBCC does not recommend cost-plus contracts for residential building work because they can limit Scheme protections.
Keep payments within the amounts allowed by law and the contract; the QBCC says paying the contractor more than allowed can affect the insurance.
What does the $200,000 maximum cover?
The $200,000 figure is the maximum the insurance pays on claims, not an automatic payout. Claims are subject to limitations and some exclusions.
The QBCC identifies these situations:
| Claim situation | What it addresses |
|---|---|
| Non-completion | The contractor does not, or cannot, finish the contracted work |
| Defective work | The contractor does not fix defects |
| Subsidence or settlement | The building suffers subsidence or settlement |
| Damage after an accepted non-completion claim | The building project is damaged by fire, storm, vandalism or theft after the insurer accepts the non-completion claim |
After paying a claim, the scheme tries to recover the amount paid to finish or fix the work from the contractor.
How long does the cover last?
The QBCC states that cover lasts for 6 years and 6 months from whichever happens first:
- The contract is entered into.
- The premium is paid.
- Work commences.
If the residential construction work took more than 6 months to complete, cover can be extended by 6 months from the cover commencement day.
Claims must be made within timeframes that depend on the claim type, so the cover period should not be treated as a universal claim lodgement deadline. Cover cannot be renewed after it expires.
Does the cover stay with the property?
Yes. Home warranty insurance is attached to the property, so it remains in place if the home is sold during the cover period. It cannot be transferred between contractors.
A buyer or the buyer’s legal agent can search for any home warranty insurance attached to the property. The person making a claim does not have to be the person who originally contracted the building work.
Is home warranty insurance the same as home and contents insurance?
No. The QBCC expressly states that home warranty insurance is not home and contents insurance. It responds to defined losses and defects connected with residential construction work, rather than replacing a separate policy for the home and its contents.
This is general information, not financial or legal advice. Check the current QBCC regulator page and the relevant policy’s PDS and contract before relying on the cover.
Sources
- Queensland Building and Construction Commission: What is home warranty insurance, updated 11 May 2025
- Queensland Building and Construction Commission: Home warranty insurance — A guide for homeowners, updated 24 Jan 2025
FAQ
Is insurance compulsory for a project valued at exactly $3,300?
No. The QBCC states the compulsory threshold as more than $3,300, including materials, labour and GST.
Can I make a non-completion claim under a cost-plus contract?
No. Cost-plus contracts are covered only for defective-work claims. A non-completion claim requires a fixed-price residential contract with a licensed contractor.
Does selling the home end the home warranty cover?
No. The policy is attached to the property and remains in place if the home is sold during the applicable cover period.
Is home warranty insurance home and contents insurance?
No. The QBCC expressly distinguishes them. Home warranty insurance relates to residential construction work and is not a substitute for home and contents insurance.
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