Owner Builder Warranty Insurance Victoria

General Information

As a Victorian owner builder you are required to purchase owner builder warranty insurance to protect any subsequent owners of your completed project.

At FD Beck, we can assist you with all aspects of your owner builder warranty insurance, from finding you the best available policy to making sure you understand the terms and conditions of your insurance, we’ve been helping Victorian owner builders with their insurance needs for generations.

Who Will be Covered by Your Owner Builder Warranty Insurance?

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 homeowner in certain circumstances where the building work is incomplete or defective and the owner builder has died, disappeared, or become insolvent.Since 1st July 2015 cover is also available in certain circumstances if the owner builder has failed to comply with a Victorian Civil and Administrative Tribunal (VCAT) or court order.

Owner Builder Warranty Insurance may also cover expenses such as alternative accommodation, removal and storage that are reasonably and necessarily incurred for a period of up to 60 days.

Do I Have to Buy Owner Builder Warranty Insurance?

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.

What Happens If I Don’t Buy Owner Builder Warranty Insurance?

Under section 135 of the Building Act 1993, Victorian owner builders who sell their property without obtaining the necessary owner builder home warranty insurance can face fines and penalties of $15,546 (exact figures are subject to change).

The purchaser of the property will also have the right to void the contract of sale and have their deposits refunded in full if the owner builder doesn’t obtain adequate owner builder home warranty insurance.

How Long am I Responsible for the Property as the Owner Builder?

The warranty period under the Building Act 1993 is six years from the issuing of the certificate of occupancy or final inspection. This means that insurance will be required when an owner builder sells their dwelling within the six-year Statutory Warranty period.

How Long Will The Home Purchaser Be Covered Under the Owner Builder Warranty Insurance?

How long the subsequent owner is protected under your insurance policy will depend on whether the claim has arisen from non-structural defects or causes other than non-structural defects.

For example:

Non-Structural Defects

The policy will provide cover for any loss or damage arising from non-structural defects, commencing on the date of the contract of sale and ending two years after the work’s completion date. So, if you’re selling your house more than two years after the work’s specified completion date, the policy won’t cover any losses or damage that arises from a non-structural defect.

Other Causes

Your insurance policy will provide cover for any loss or damage that arises from any cause other than non-structural defects from the date specified on the contract of sale until six years after the work’s specified completion date.

How Much Will the insurance Company Pay in the Event a Claim is Made?

The insurance company will only pay up to $300,000 in total for any claims made under the owner builder warranty policy for each home.

Do I Have to Pay for any Excesses?

Yes, you will be required to pay the following amounts for each claim made under this policy for each home that’s covered in your policy/policies:

Any amount for claims under $500 that are made between three to six months after the work has been completed
The first $500 for claims made between one to three years after the work has been completed
The first $750 for claims made between three to five years after the work has been completed
The first $1,000 for claims made at any point once five years has passed since the work was completed