Owner Builder Domestic Building Insurance (DBI) (also commonly referred to as Owner Builder Warranty Insurance) is for the benefit of the purchaser or subsequent purchaser of your property and not the owner builder. It covers the home owner in certain circumstances where the building work is incomplete or defective and the owner builder has died, disappeared, or become insolvent or, if the insurer is VMIA and the insurance was issued after 1 July 2015, the builder has failed to comply with a tribunal or court order.
Owner Builder Warranty Insurance may also cover expenses such as alternative accommodation, removal and storage that are reasonably and necessarily incurred up to 60 days.
In Victoria, under section 135 of the Building Act 1993, an owner builder shall not enter into a contract to sell or dispose of the dwelling or the land (on which the dwelling is constructed) unless the owner builder warranty insurance is in force. The exception to this is if the value of that domestic building work is less than $16,000 at the time the work was carried out as an owner builder.
In Victoria, an owner builder who sells and fails to obtain Owner Builder Home Warranty Insurance can risk fines and penalties of $15,546 under section 135 of the Building Act 1993 (fines and penalties subject to change after 30 June 2017). In addition, if a contract of sale has been entered into without Owner Builder Home Warranty Insurance, the purchaser has the right to void the contract and have their deposits refunded in full.
The Warranty period under the Building Act 1993 is 6 years from the issuing of the certificate of occupancy or final inspection. Therefore, insurance is required when an owner builder sells their dwelling within the Statutory Warranty period.
The insurance cover depends on whether loss or damage is arising from non-structural defects or causes other than non-structural defects.
The insurance company will not pay more than $300,000 in total for all claims made under this policy for each home.
Yes, you have to pay the following amounts for each claim under the policy:
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