VIC Home Warranty Insurance: What Changed on 1 July 2026

On 1 July 2026, Victoria replaced Domestic Building Insurance (DBI) with a new mandatory scheme called Home Warranty. Three things changed: the threshold, the cap, and, most importantly, when you're actually allowed to claim.

Home Warranty insurance is Victoria's mandatory cover for eligible domestic building work over $20,000, on buildings up to three storeys, under contracts signed on or after 1 July 2026.

Quick answer:

It replaced DBI, and unlike DBI, it can respond while your builder is still trading, if they're unable or unwilling to fix defective, incomplete or non-compliant work.
Cover is automatic from the moment you sign, even before your builder has paid the premium.
The maximum payout is $400,000, up from $300,000 under DBI.
Which scheme actually applies to your contract depends entirely on the date you signed it; see DBI vs Home Warranty: does the date you signed decide your cover? if you're not sure.

The rest of this guide covers what changed in full, what's covered, and how to verify your own cover is actually in place before you pay a deposit.

What changed from DBI to Home Warranty

Three things changed. One of them matters more than the other two combined.

The claim trigger. DBI only paid out if your builder died, disappeared, or became insolvent, a last-resort model. Home Warranty responds where eligible work is incomplete, defective or non-compliant and the builder is "unable or unwilling" to complete or fix it, which can apply while the builder is still operating. Consumer Affairs Victoria and the Building and Plumbing Commission (BPC), the regulator that now administers Home Warranty, both describe the scheme this way. As Norton Rose Fulbright summarised it, "the builder will no longer need to be dead, insolvent or to have disappeared before the owner can access insurance."
The threshold. The mandatory cover threshold rose from $16,000 to $20,000.
The cap. The maximum payout rose from $300,000 to $400,000.

This isn't an instant payout, and it's worth understanding the process before you need it. You issue a formal complaint notice, the builder has 28 days to respond, and if the matter is still unresolved after 91 days it can escalate to Victoria's Civil and Administrative Tribunal (VCAT), with Home Warranty assistance triggered if the builder still doesn't act.

The formal name behind all of this is the Building (Statutory Insurance Scheme) Regulations 2026. Some legal commentary calls it the "First Resort Home Warranty Scheme." "Home Warranty" is the name the BPC and Consumer Affairs Victoria use, and it's the term this guide uses throughout.

Which scheme applies to you

The scheme that covers your project depends on one date: when your contract was signed, not when construction started or when it finishes.

Contract signed on or after 1 July 2026: Home Warranty applies. You're covered automatically from the moment you sign, even before your builder has paid the premium. The builder then has 10 business days from signing, or from work starting if that's earlier, to pay it to the BPC. A later variation that pushes your contract to $20,000 or more restarts the same 10-business-day clock.
Contract signed before 1 July 2026: DBI still applies, on its original terms ($16,000 threshold, $300,000 cap, last-resort claim triggers), for the life of your build, even if construction is happening right now.

Two homeowners can sign contracts with the same builder six weeks apart and end up with materially different protection. If you're not sure which scheme covers you, check the date on your own signed contract, not the date work started on site (the linked guide at the top of this article covers the full comparison and what it means if you're mid-build under DBI).

What Home Warranty covers

Home Warranty is a real improvement on DBI, but it isn't unlimited protection. The $400,000 cap applies per home, and several sub-limits sit inside it:

Deposit refund, if work hasn't started: up to 5% of the contract price
Incomplete work during construction: up to 30% of the contract price (up from 20% under DBI)
Accommodation, removal and storage costs: up to $12,000
Major defects and non-compliant work: claimable within 6 years
Other, non-major defects: claimable within 2 years
Time limit to lodge a claim: within 12 months of the contract ending, for incomplete work, or within 12 months of becoming aware of a defect
Per-claim deductible: $500 to $1,000, depending on the age of the defect

Home Warranty does not cover ordinary disputes over price, delays or scope that don't amount to incomplete, defective or non-compliant work. Those still go through direct negotiation, then BPC dispute resolution, then VCAT if unresolved.

These figures apply equally to renovations and new builds; there's no smaller, scaled-down version of the scheme for a renovation. A kitchen renovation quoted at $17,000 that crosses $20,000 after a mid-project variation is treated exactly the same as a new build over the threshold. For the renovation-specific detail, including how the threshold interacts with variations, see is your renovation actually covered by Home Warranty?

How to check your builder has Home Warranty cover in place

Automatic cover from the moment you sign is a genuine safety net. It's still worth confirming the certificate exists, and is genuine, before you pay a deposit.

Use the BPC's Search insurance for your property tool. It lets you check whether a Home Warranty or DBI certificate has been issued for your specific property, free, in a couple of minutes.
Scan the QR code on the Certificate of Insurance. Your builder should provide this. Scanning it opens the BPC's own verification page with the policy number already populated, so you can confirm it's current and genuine, rather than relying on a copy handed to you.
Match the names. The entity named on the certificate should match the entity named in your contract and building permit exactly.
If you're unsure whether your project is eligible, the BPC's Check whether insurance may apply tool can help you work out whether DBI or Home Warranty applies to your situation.

If nothing turns up yet, that isn't necessarily a red flag on its own. Your builder has up to 10 business days after signing to pay the premium before a certificate is issued. Check again after that window, or ask your builder directly for the certificate once it's confirmed.

Verifying independently matters because the BPC's own disciplinary record confirms fraudulent insurance certificates have occurred in real Victorian cases. A certificate the builder hands you is a starting point, not proof.

Red flags before you pay a deposit

None of these automatically mean your builder is a poor choice. Each is a prompt to ask a direct question before you commit:

The builder can't or won't produce a Certificate of Insurance before taking a deposit, a breach carrying a maximum penalty of 500 penalty units for an individual and 2,500 for a corporation (roughly $104,550 and $522,750 respectively at the FY2026-27 penalty unit value)
The certificate details don't match when you check them through the BPC's own tool or QR code
The builder says Home Warranty "doesn't apply" to a contract clearly over $20,000 and signed after 1 July 2026
You're being pressured to sign before anyone has confirmed which scheme, DBI or Home Warranty, applies to your contract
The builder's registration shows a recent suspension, or a history of rectification orders requires clarification

Before you commit, it's worth running a VIC builder registration check alongside confirming insurance status. Registration confirms the builder is legally entitled to take the job. Insurance confirms what happens if the job goes wrong.

VIC Home Warranty FAQs

Is Home Warranty the same as the Statutory Insurance Scheme?
Yes. "Home Warranty" is the plain-English name the BPC and Consumer Affairs Victoria use. The regulations behind it are formally titled the Building (Statutory Insurance Scheme) Regulations 2026, and some law firms call it the First Resort Home Warranty Scheme. These describe the same single scheme, not different products.

My contract was signed in June 2026. Does Home Warranty protect me?
No. Your project stays under the old DBI scheme, on its original terms, for the life of your build. The BPC continues to administer legacy DBI policies alongside new Home Warranty cover.

Can I make a claim just because I'm unhappy with the pace of work?
No. Home Warranty responds to incomplete, defective or non-compliant work where the builder is unable or unwilling to fix it, not to ordinary disputes over price, delays or scope.

Is Victoria's Home Warranty the same as NSW's HBCF?
No. NSW's HBCF remains a last-resort scheme, claimable on builder insolvency, death, disappearance or licence action, with a $340,000 cap. Victoria's Home Warranty has a higher $400,000 cap and a claim trigger based on incomplete, defective or non-compliant work, closer to first-resort in substance. Don't treat Victoria's model as a national standard; it's a Victoria-specific reform.

What happens if my builder ignores a rectification order?
For a standard house, the BPC can issue a rectification order requiring the builder to fix or complete the work, at any point during construction or up to 10 years after completion. Ignoring one is itself an offence and grounds for the builder's registration to be suspended immediately, action that can happen while the build is still underway. For the full claim process and what you can recover, see what happens if your builder won't fix defective work.

Before you pay the next progress payment

Victoria's construction sector isn't in crisis. Provisional figures show construction insolvencies actually eased slightly in FY2025-26. But close to 1,000 Victorian construction firms still failed that year, and under the old DBI model, that was the only scenario where insurance actually helped you. As Minister Nick Staikos put it when the reforms took effect, the goal is making sure "consumers get the safe, affordable and high-quality homes they pay for." Home Warranty widens your protection considerably, but it still comes with caps, sub-limits and a process.

Confirming your builder's insurance status, alongside their registration and wider background, before you sign or pay a deposit is a short check with a real payoff. For the national picture on registration and licensing, see our guide to how to check a builder licence in Australia.

Check your builder's registration and insurance status before you sign or pay a deposit.

This article is a decision aid, not legal advice. Home Warranty thresholds, caps and claim rights are set out in the Building (Statutory Insurance Scheme) Regulations 2026 and may be updated. Always verify current cover and figures directly with the Building and Plumbing Commission before signing a contract or paying a deposit.