Making a home warranty insurance claim in NSW
In NSW, builders must take out home warranty insurance for residential building work over $20,000 under the Home Building Act 1989. The insurance covers homeowners (and subsequent purchasers within the policy period) if the builder cannot complete or rectify the work due to death, disappearance, insolvency, or licence suspension. Claims must be made within 6 years for structural defects and 2 years for non-structural defects from completion.
This is an 8-step workflow for making a home warranty insurance claim in NSW. Home warranty insurance (formerly known as home building compensation fund cover) protects homeowners when a licensed builder dies, disappears, becomes insolvent, or has their licence suspended, and the building work is defective or incomplete.
Before you start
- Evidence that the builder has died, disappeared, become insolvent, or had their licence suspended
- The home warranty insurance certificate for the building work
- Copies of the building contract, plans, and specifications
The workflow
Confirm the claim trigger exists
Verify that one of the statutory claim triggers has occurred — the builder has died, disappeared, become insolvent (liquidation, bankruptcy, or deregistration), or had their licence suspended by NSW Fair Trading. Obtain evidence of the trigger event (ASIC search, NSW Fair Trading licence check, or death certificate).
Check the insurance policy and claim period
Locate the home warranty insurance certificate and verify the policy covers the work in question. Check the claim period — 6 years from completion for structural defects, 2 years for non-structural defects. Confirm the current owner is an eligible claimant (the cover extends to subsequent purchasers).
Document the defects or incomplete work
Engage a qualified building inspector to prepare a detailed report on the defects or incomplete work. Include photographs, measurements, and references to the Australian Standards or Building Code of Australia provisions that have not been met. Obtain a scope of rectification works.
Obtain rectification cost estimates
Get two or three quotes from licensed builders for the cost of rectifying the defects or completing the incomplete work. The quotes should be based on the building inspector's report and scope of works. These form the basis of the quantum of the claim.
Prepare and lodge the insurance claim
Complete the insurer's claim form (currently icare HBCF in NSW) and attach all supporting documents — insurance certificate, evidence of the claim trigger, building inspection report, rectification quotes, building contract, and correspondence with the builder.
Respond to the insurer's assessment
The insurer will appoint an assessor to inspect the property and review the claim. Attend the inspection with the client and the building inspector if possible. Respond to any requests for further information promptly to avoid delays.
Negotiate the settlement offer
Review the insurer's assessment and any settlement offer. Compare the offer to the rectification cost estimates and the building inspector's report. Negotiate if the offer is inadequate — provide additional evidence or expert opinion to support a higher amount.
Escalate to NCAT if the claim is denied or underpaid
If the insurer denies the claim or offers an inadequate settlement, lodge an application in the NSW Civil and Administrative Tribunal (NCAT). File in the Consumer and Commercial Division, attaching all evidence and correspondence with the insurer. NCAT can order the insurer to pay the claim.
What you will have at the end
A home warranty insurance claim processed and paid, covering the cost of rectifying defective work or completing incomplete work. If the insurer disputes the claim, the matter is escalated to NCAT for binding determination.
Common issues
- Claim lodged outside the 2-year (non-structural) or 6-year (structural) period from completion
- Difficulty proving the claim trigger — particularly when the builder has "disappeared" but not formally become insolvent
- Insurer's assessment significantly undervaluing the rectification costs
- Work that was not covered by home warranty insurance because it was under the $20,000 threshold
- Owner-builders who are not covered by home warranty insurance for their own work
Run this workflow on a real matter
Quillio helps prepare the insurance claim documentation, analyses the policy coverage, and drafts submissions for NCAT if the claim is disputed. See /practice-areas/construction-lawyers or start a free trial.
This workflow is a general guide for NSW home warranty insurance claims. The home warranty insurance scheme has changed over time — the applicable rules depend on when the insurance was taken out. Always verify current requirements with icare HBCF and NSW Fair Trading.
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