WA HII Reforms: $40,000 Deposit and $200,000 Works Caps for $20,000-Plus Projects

Figures checked 1 October 2026: in an 8 April 2025 statement, the WA Government said the McGowan Government had approved home indemnity insurance (HII) reforms under which eligible homeowners may be entitled to up to $40,000 for lost deposits and up to $200,000 for incomplete or defective works if their builder dies, disappears or becomes insolvent. The statement said the changes would take effect “as soon as possible” but gave no commencement date, and it described HII as compulsory for residential building projects valued $20,000 or more, with insurance in the owner’s name before the builder accepted payment or commenced work.

Is the HII threshold $20,000 or more, or over $20,000?

The dated WA Government materials use slightly different wording:

Both statements point to HII for work above $20,000. For a project valued at precisely $20,000, however, the official wording differs, so check the current regulator page or ask Building and Energy before relying on this summary.

What do the $40,000 and $200,000 reform caps mean?

The 8 April 2025 announcement set out the following maximum amounts:

“Up to” is important: these are not automatic payments. Eligibility, the circumstances of the loss, valid claims and the policy terms determine whether an amount can be paid.

The broader 20 May 2025 guidance describes a “relevant circumstance” as including an individual builder dying, disappearing or becoming insolvent, or a corporate builder ceasing to exist or becoming insolvent. It also covers cancellation of a builder’s registration by the State Administrative Tribunal, or non-renewal by the Building Services Board, where the builder failed to meet prescribed financial requirements.

When must the builder obtain and provide the certificate?

Under the Home Building Contracts Act 1991, the 8 April statement says the builder must take out HII in the owner’s name before accepting payment or commencing work. The 20 May guidance sets out this practical sequence:

1. Before signing the building contract or paying a deposit: the builder must give the owner a copy of the “Notice for the homeowner”, which is Schedule 1 of the Home Building Contracts Regulations 1992.
2. Before claiming payment or commencing contract work: the builder must obtain an HII certificate of insurance for the proposed work.
3. After obtaining the certificate: the builder must provide a copy to the owner and the permit authority as part of the building approval process.

The WA Government says builders who fail to obtain required HII risk substantial penalties and disciplinary proceedings.

How can I check that I have the correct certificate?

Under the guidance dated 20 May 2025, the permit authority must check the HII certificate before granting the building permit. It must be:

• submitted by the builder for the proposed work;
• watermarked;
• issued by QBE; and
• consistent with QBE’s records in the Builders Warranty Insurance Certificate Register.

A homeowner can compare the certificate details with that register. The guidance also says the permit authority must ensure that another document—such as an HII eligibility certificate or a construction/public liability insurance certificate—has not been provided instead of the HII certificate.

Approved insurance providers began watermarking HII certificates in 2016. Building and Energy can also advise on approved HII providers; the regulator guidance lists 1300 489 099 and bcinfo@demirs.wa.gov.au.

How long does the insurance usually cover the work?

In most cases, the 8 April 2025 statement says the policy must cover the construction period and six years from the practical completion date. That is the usual cover period described in the announcement, not a guarantee that every claim will be accepted. The policy’s Product Disclosure Statement sets out the applicable terms.

What happens if there is an exemption or a change of builder?

The 20 May 2025 guidance describes several separate situations:

• Standalone associated work: HII is not required for associated work performed alone under a separate contract, such as installing a swimming pool, carport or pergola, or landscaping.
• An exemption claim: if a builder claims an exemption under the Home Building Contracts (Home Indemnity Insurance Exemptions) Regulations 2002 and there is uncertainty, check with Building and Energy.
• A change of builder: a proposed new builder must obtain HII for the proposed work or required stage and give a copy to the owner. Giving a copy to the permit authority is also advisable.
• An owner-builder planning to sell: HII must be obtained if the owner-builder intends to sell within seven years after the building permit was granted. The certificate must be given to the prospective purchaser before settlement.

This is general information, not financial or legal advice. Check the current WA Government regulator page and the policy’s Product Disclosure Statement before relying on a threshold, cap, exemption or certificate requirement.

Sources

• WA Government: Commerce Minister media statement – Insurance reforms to better protect home owners
• WA Government: Home indemnity insurance – a reminder about your obligations

FAQ

Are the $40,000 and $200,000 amounts automatic payouts?

No. The 8 April 2025 announcement says eligible homeowners “may be entitled” to those amounts in the stated circumstances. The amount depends on eligibility, the relevant circumstances, valid claims and the policy terms.

Did the reform caps commence on 8 April 2025?

The cited statement did not provide a commencement date. It said the changes would take effect “as soon as possible”, so the statement alone does not establish that 8 April 2025 was the start date. Check the current regulator page and the relevant policy PDS.

Can public liability insurance replace HII?

No. The 20 May 2025 guidance says an HII eligibility certificate or construction/public liability insurance certificate must not be provided instead of the HII certificate of insurance.

What should I do if the builder changes before completion?

The proposed new builder must obtain an HII certificate for the proposed work or required stage and provide it to the owner. The owner should check that cover is in place; providing the certificate to the permit authority is also advisable.

What must an owner-builder do when selling within seven years?

An owner-builder intending to sell within seven years after the building permit was granted must obtain HII and provide the certificate to the prospective purchaser before settlement.