Domestic Building Insurance or Home Warranty: Which Scheme Applies to a Victorian Building Contract?

According to the Building and Plumbing Commission (BPC), in guidance updated 1 July 2026, Domestic Building Insurance (DBI) may apply to work under a contract signed before 1 July 2026 and was required for work valued over $16,000, while Home Warranty may apply to eligible work valued at more than $20,000 under an eligible contract signed on or from that date. A DBI Certificate of Insurance issued before 1 July 2026 continues under the DBI policy and does not transfer to Home Warranty. Figures checked 1 October 2026.

Which scheme should I check first?

The BPC says the applicable scheme depends on both when the building contract was signed and when the insurance cover was issued. Check the documents in this order:

Ask the builder for the signed contract, DBI Certificate of Insurance, current policy schedule and relevant policy documents. If the dates conflict, seek confirmation from the builder and check the current BPC guidance before relying on either scheme.

Which value threshold applies?

Three separate thresholds answer different questions. Consumer Affairs Victoria’s guidance updated 24 September 2025 explains the contract and registration requirements alongside the former DBI rule.

A contract requirement is not the same as a scheme-insurance requirement. A written major domestic building contract does not by itself establish that the work qualifies for Home Warranty.

Major domestic building work includes constructing or erecting a home, renovations, alterations, extensions, repairs and associated work such as landscaping, paving, retaining structures, driveways, fencing, heating, air conditioning, water supply and sewerage. Demolition or removal of a home is also listed as major domestic building work.

A major domestic building contract is not required for a job involving only activities such as plastering, wall or floor tiling, electrical work, glazing, insulating, painting, plumbing, gas-fitting and draining, or installing floor coverings. Consumer Affairs Victoria nevertheless recommends a written contract for all building work worth $10,000 or less.

Being the owner-builder on the permit does not remove all builder obligations. Even then, the builder must be BPC-registered to handle a contract worth more than $10,000 and must use a major domestic building contract for that work. BPC registration is also required to reblock, restump, demolish or remove a home regardless of the value of that work.

What must the builder give the client before signing or paying?

Consumer Affairs Victoria’s checklist updated 8 April 2026 sets out the following sequence:

1. Before signing a major domestic building contract: give the client a copy of the Domestic Building Consumer Guide.
2. In the building contract: identify the client’s warranty rights, whether the job is a major domestic building contract or not.
3. Before any deposit or other payment for DBI work: provide a copy of the DBI policy and a certificate of insurance covering the property.
4. Before renovation work starts: the client should check with their home and contents insurer that renovations are covered; extra cover may be required.
5. Ask the builder: request a copy of their current certificate of public liability insurance.

The cited BPC Home Warranty guidance does not set out a separate mandatory Home Warranty document bundle equivalent to the DBI handover requirements. Ask the builder to identify the scheme and provide the applicable current policy documents, then check those documents and the regulator page.

What does DBI cover?

DBI provides limited protection. BPC guidance describes it as generally providing up to $300,000 for loss suffered because the builder died, disappeared or became insolvent for homes up to three storeys.

Consumer Affairs Victoria also states that DBI can cover costs up to $300,000 to fix:

• structural defects for 6 years;
• non-structural defects for 2 years; and
• in some circumstances, incomplete work, although a claim may be limited to 20% of the contract price.

A DBI policy issued on or after 1 July 2015 also provides cover if the builder fails to comply with a final order made by VCAT or a court. The cited guidance does not state that this extension applies to a policy issued before that date.

These figures are policy limits, not an automatic payout. DBI is additional to the builder’s contractual obligations and warranties.

What protection does Home Warranty provide?

Home Warranty may provide broader protection than DBI. It may apply where eligible domestic building work is incomplete, defective or non-compliant and the builder fails or refuses to complete or fix the work.

Unlike DBI, Home Warranty is not limited to circumstances where the builder has died, disappeared or become insolvent. The maximum assistance available is $400,000 in total per home, subject to eligibility, policy limits and exclusions.

The cited BPC guidance states the monetary maximum but does not state a fixed cover period. Do not apply DBI’s 6-year structural and 2-year non-structural periods to Home Warranty; check the current policy documents for its duration and exclusions.

What did the 2025 amendment change?

Consumer Affairs Victoria records that the Domestic Building Contracts Amendment Bill 2025 passed the Victorian Parliament on 11 September 2025. The later BPC guidance reflects the practical scheme transition:

• Home Warranty starts on 1 July 2026.
• It applies to new eligible domestic building work valued at more than $20,000 under eligible contracts signed on or after 1 July 2026.
• The BPC provides Home Warranty for that new eligible work.
• Existing DBI policies continue under their current terms and conditions.
• DBI cover does not transfer to Home Warranty.
• The Victorian Managed Insurance Authority’s DBI is now part of the BPC.

The cited official pages do not reproduce the full amendment or commencement wording. For a contract close to the transition date, check the current regulator guidance rather than assuming that every old or new contract follows the same rule.

Does scheme insurance replace the builder’s warranties?

No. Implied warranties apply automatically to all domestic building work, regardless of its cost or whether there is a written contract. They cannot be signed away.

A builder or tradesperson must generally:

• perform the work properly and in a workmanlike manner;
• follow the contract’s plans and specifications;
• use good and suitable materials that are new, unless the contract states otherwise;
• apply reasonable care and skill;
• comply with legal requirements;
• complete the work by the contractual date or within the agreed period;
• ensure completed homes, extensions, renovations, repairs and kit homes are suitable for occupation; and
• ensure other work and materials are reasonably fit for their intended purpose.

These obligations operate as warranties under the Domestic Building Contracts Act 1995 and as consumer guarantees under the Australian Consumer Law. The client has rights under both laws.

Implied warranties can transfer to a new owner for up to 10 years from completion of the work if the property is sold within that period. If the work is older than 10 years, seek legal advice about any remaining rights.

This is general information, not financial or legal advice. Check the current regulator page and the policy’s PDS before relying on a scheme decision or making a claim.

Sources

• Building and Plumbing Commission — Domestic Building Insurance and Home Warranty
• Consumer Affairs Victoria — Implied warranties and domestic building insurance
• Consumer Affairs Victoria — What work requires a building contract?

FAQ

Does a contract worth more than $10,000 automatically have scheme insurance?

No. More than $10,000 triggers the written major domestic building contract requirement. DBI was required above $16,000, while Home Warranty applies to eligible work valued at more than $20,000 under eligible contracts signed on or after 1 July 2026.

Does Home Warranty replace every existing DBI policy?

No. A DBI Certificate of Insurance issued before 1 July 2026 continues under its DBI policy. DBI cover does not transfer to Home Warranty.

What if my contract was signed before 1 July 2026 but I cannot find the certificate?

DBI may apply, but the BPC says both the contract date and cover issue date matter. Do not guess: request the certificate and policy documents from the builder and check the current BPC guidance.

What must I receive before paying a deposit?

For work requiring DBI, the builder must provide a copy of the policy and a certificate of insurance covering the property before any deposit or other money is paid.

Does DBI or Home Warranty remove my warranty and consumer-guarantee rights?

No. Scheme insurance is additional to the builder’s contractual obligations. Statutory warranties and consumer guarantees apply by law and cannot be signed away.