Planning to build or renovate a home in Queensland? You need to know about home warranty insurance and builders licensing. Home warranty insurance protects you when problems arise with your new home or renovation. It ensures that if your builder or building work contractor of any trade goes out of business or fails to rectify defects, you are not left out of pocket.
Knowing the rules around builders licensing is crucial. In Queensland, all building work contractors or any trade must be licensed by the Queensland Building and Construction Commission (QBCC). This licensing ensures that builders of any kind are registered with the government body and have the industry specific experience and a minimum level of financial backing to responsibly contract for building work to the public.
Understanding these safeguards helps you make informed decisions and reduce your exposure to risk when undertaking building work. By knowing what protections are in place, you can confidently move forward with your building project.
Table of Contents
What is Home Warranty Insurance?
Home warranty insurance is a policy managed and administered by the QBCC of Queensland that covers all building projects with a value greater than $3300. It is a policy and system specific to the state of Queensland and is not replicated in any other state of Australia.
Each home warranty insurance policy is specific to a contract of building work between a builder and a home owner. The builder is obligated to take out and pay for the insurance on behalf of the home owner. This insurance is mandatory for residential construction work of any kind in Queensland, offering financial protection if the builder cannot fix defects or if other problems arise either during or after the building work has been undertaken. It covers structural issues, non-completion, and other significant problems that may arise.
For example, a home owner has decided to have a Roof Restoration in Brisbane undertaken on their home. The value of the quote is $6800+GST. This requires a home warranty Insurance policy be taken out as the building work is above $3300. The roofing contractor in this case would take out the Home Warranty Insurance Policy and pay around $200 to the QBCC for the creation of the policy to Insure the Roof Restoration for the home owner.
Purpose of Home Warranty Insurance
The purpose of home warranty insurance is to safeguard Queensland home owners. It ensures the home owner against the cost of faulty work being undertaken to their property and limits the potential financial burden if construction defects occur and are not fixed. It has no benefit to the builder or contractor. This insurance also covers non-completion in case the builder goes insolvent or discontinues business.
Policy Limitations
While comprehensive, home warranty insurance does have limitations. It typically does not cover general wear and tear, owner faults, or damage from natural disasters. Claims must be filed within the coverage period, and certain conditions may apply. It’s vital to read and understand the policy to know what’s excluded. Knowing these exclusions helps manage expectations and plan accordingly. The policy expires 6 years and 6 months after the commencement date. The commencement date is either when the policy was taken out or when the contract commenced, whichever was first.
The Queensland Builders Licensing Framework
In Queensland, builders need a licence to operate legally. Knowing how to verify a licence and the type of building category a contractor is licenced for is essential for anyone entering into a build contract.
How do I check if someone has a builders licence?
To check if a builder has a valid licence, visit the Queensland Building and Construction Commission (QBCC) website. The site offers an online licence search tool where you can enter the builder’s name or licence number. This search shows the licence status, which must be current for the builder to work legally and also shows the category of which the builder is licenced for.
Licence category
Another way to verify is to ask the builder directly for their licence card. The QBCC issues licence cards for both individuals and corporations however no photo is printed on the card.
If the builder cannot provide proof, it’s best to look for someone else. Operating without a valid licence is illegal and can lead to poor-quality work.
Risks of using an unlicenced building contractor
Using an unlicensed builder or contractor in Queensland has several ramifications but the most significant of all is that Home Warranty Insurance will definitely have not been paid and there will be no policy covering the building work for which the unlicenced contractor is about to undertake. A new Home Warranty Insurance Policy can only be taken out by a licenced building contractor with the QBCC. The quality of work undertaken may or may not be in question with an unlicenced contractor. It is also highly likely that the contractor will not qualify for public liability insurance if they are not licenced for the building work they are contracting which comes with further risk to the client should anything go wrong.
What category of Public liability Insurance should a contractor have?
A contractor must have Public liability insurance to operate in Queensland. This insurance covers damages or injuries caused by their work. The required amount can vary, but usually, a minimum of $5 million cover is expected. Many professional contractors or more significant building work contractors will hold a policy for 10 or 20 million.
You should ask the contractor for a copy of their liability insurance certificate of currency. Look for key details like the policy number, coverage limits, and expiration date. This ensures they are prepared for any accidents or damages that might occur during the job.
Make sure to check that the insurance is valid before starting any work. This precaution can save you from potential legal and financial issues.
Eligibility Criteria for Home Warranty Insurance
To qualify for home warranty insurance in Queensland, both the builder’s qualifications and specific project details are critical.
Claim Process and Dispute Resolution
Learn the steps to file a claim, understand how it’s assessed, and explore the ways to resolve disputes with your home warranty insurance in Queensland.
Filing a Claim
To start your claim, contact your insurance provider. Provide details like your policy number, the nature of the defect, and the date it was discovered. It’s important to act quickly. Most policies have strict time limits.
Document everything. Take photos and keep any related receipts or reports. This helps support your claim.
Submit your claim form as instructed by your insurer. You may need to provide additional details or meet with an assessor.
Dispute Resolution Mechanisms
If you disagree with the assessment or decision, there are ways to resolve disputes. Initially, contact your insurance provider to discuss your concerns. They may re-assess the claim or provide an explanation.
If this doesn’t resolve the issue, you can take it to an external body like the Queensland Building and Construction Commission (QBCC). The QBCC can investigate and provide mediation services.
Other options include seeking legal advice or lodging a complaint with an ombudsman. Each dispute mechanism comes with its process, so be sure to follow the guidelines carefully.
FAQs
Learn the basics of home warranty insurance and builders licensing in Queensland, including coverage details, how to determine your needs, and requirements for builders’ licences.
QBCC insurance covers repairs or replacements for defects, incomplete work, and structural issues. It also includes protection for non-structural damage and alternative accommodation if you need to move during repairs.
You need QBCC insurance if your project involves residential construction work costing over $3,300. This includes renovations. Verify with your builder to ensure they’ve taken out the appropriate cover before work begins.
Builders' warranties in Queensland last 6 years and 6 months from the completion of the work. The first 12 months cover non-structural defects and the remaining 5 years and 6 months cover structural defects.
The cost of home warranty insurance is based on the contract price or the market value of the work. Different rates apply depending on the type and value of the building work. Consult the QBCC’s insurance calculator for specifics.
Certain types of work are exempt from QBCC insurance. These include contracts under $3,300, commercial building work, and owner-builder projects where the homeowner does their own work.
To obtain a builder's license in Queensland, you need a combination of qualifications, experience, and a good financial record. Specific requirements vary depending on the licence class, but generally include relevant industry experience and passing a technical or managerial exam. Certain minimum criteria must be demonstrated to the QBCC for their assessment and consequent issue of a building work contractors licence.
