How does it work?

Before you start building

Before your builder or contractor begins any kind of residential building work valued over $20,000 (or receives any payment under the contract for the work, including a deposit), they are legally required to provide you with evidence that they have taken out cover for your property under the Home Building Compensation Fund (HBCF) scheme.

It is your responsibility as the homeowner to ensure that you have received your HBCF or Home Warranty Insurance certificate before paying a deposit or any work is carried out. The certificate should outline the names of the builder/constructor and homeowner, the address where the works are being carried out, the contract price, and a brief description of the building work.

If you aren’t covered you won’t be able to make a claim if your builder or contractor becomes insolvent, disappears, dies, or has their license suspended or if the work is incomplete or defective.

You can check the validity of a Certificate of Insurance through the public online certificates register here

What you’re covered for

HBCF insurances protect you against any losses that may occur from defective and incomplete work where the building or contractor:

• Become insolvent
• Dies
• Disappears, or
• Has their building license suspended due to non-compliance with a money order in your favour by the NCAT or a court

How long are you covered for

The cover can be claimed:

1. Non-Completion- For 12 months for losses resulting from incomplete works, running from the date of the end of the work or failure to start work.
2. Structural Defects- The policies for residential and owner-builder work provide cover for loss or damage arising from a structural defect for 6 years after the completion of work.
3. Other Loss and Damage- For loss or damage arising from anything other than a structural defect (Eg- non-structural defect) you are covered for 2 years after the completion of work.

The cover also protects you and any subsequent purchasers of your home for the above.
 

Before making a claim

You can protect your rights to claim in the future by lodging a Notification of Loss from with HBCF. Once you have notified of your possible claim, you will need to take appropriate action to try and work with the original builder to complete and/or repair the work. This can be done by the following-

• Lodging a complaint with NSW Fair Trading
• Lodging a claim with NCAT or a court

It is also important that you-

• Check your certificate of insurance
• Check that you are within the claim notification period
• Try settling the dispute with the builder
• Speak to a Claims Manager

Once you have checked that you have gotten all of the necessary information and tried to resolve your issues via the above, you can then start a claim.

Making a claim

You can make a notification or HBCF at any time, but to make a claim there must be a trigger event

• Becomes insolvent
• Dies
• Disappears
• Or has their building license suspended due to non-compliance with a money order in your favour by the NCAT or a court.

It’s important to make a claim as soon as you become aware of one of the above triggers. Failure to notify and claim in accordance with the policy may result in your claim not being accepted.
 

Caring for your mental health

Dealing with building problems such as insolvency, structural defects etc can be very stressful. It is important that you contact counseling services if you are feeling overwhelmed to help you through this period.