Services > Building and Construction Law > NSW Home Warranty Insurance Fund

NSW Home Warranty Insurance Fund

What is the New South Wales Home Warranty Insurance Fund?

The New South Wales Home Warranty Insurance Fund is a statutory insurance scheme that provides insurance cover for certain residential construction works valued at more than $20,000. The scheme provides protection for consumers where:

  • There has been faulty or incomplete work on residential buildings.
  • The builder becomes insolvent, dies or disappears.
  • The license of the Builder is suspended by NSW Fair Trading.

The scheme is currently administered by the NSW Self Insurance Corporation under the NSW Self Insurance Corporation Act 2004 and is a part of the Office of Finance and Services.

Who are the insurers?

The New South Wales Home Warranty Insurance Fund outsources the provision of services to insurance agents. These agents are Calliden Insurance Limited and QBE Insurance (Australia) Limited.

Is there a limit to the amount I can claim?

The maximum amount of cover provided under the scheme is $340,000 (for policies issued from 1 February 2012). There are other limitations on the amount that a homeowner can claim. For example, a claim for non-completion is capped at 20% of the contract price.

What works are covered?

The New South Wales Home Warranty Insurance Fund covers ‘residential building work’ and ‘owner-builder work’ as outlined in the Home Building Act 1989 (the Act) and the Home Building Regulation 2004.

When are premiums payable?

A policy of insurance for residential building work must be taken out, by the holder of the license, prior to commencing work.

The premium payable is based on an assessment of a number of risk factors which are generally specific to the project. These risk factors may include the location of the project, the contract price and the risk presented by the type of work (e.g. structural, non-structural, owner-builder etc.). The builder must be assessed for eligibility before they can apply for a certificate of insurance in relation to building projects.

How do I make a claim?

A homeowner seeking to make a claim under the New South Wales Home Warranty Insurance Fund must first give written notice using the Loss Notification Form to the insurance agent who issued the Certificate of Insurance.

A homeowner must then take action to try to have the builder finish any incomplete work and rectify any defective building work by, for example, lodging a complaint with NSW Fair Trading, lodging a building claim with the NSW Civil & Administrative Tribunal (NCAT) and/or commencing court proceedings to try to have the builder finish any incomplete work or rectify any defective work. If the homeowner fails to take steps to enforce their statutory warranty, the HWIF may be able to reduce their liability under the insurance policy.

What happens after I submit the Loss Notification Form?

Once the insurance agent receives the Loss Notification, they will undertake preliminary investigations into the matter. They will also send the homeowner a Home Warranty Insurance Claim Form within 5 business days of the contact. The homeowner should complete this form as soon as practicable and return it to the insurance agent. The insurance agent will notify the homeowner whether the claim has been accepted or whether further information is needed within 30 days of receipt of the claim.

How long do I have to make a claim?

A homeowner wishing to make a claim must lodge a Loss Notification with the insurance agent within six months of the homeowner becoming aware of defective work. In the event of incomplete work, the homeowner should lodge a Loss Notification within 12 months of the contract date, or the date of the commencement of work pursuant to the contract, or the date the work ceased, whichever is the later.

When does my insurance coverage end?

The coverage periods are as follows:

  • Non-completion – 12 months from the failure to commence or of the cessation of the work.
  • Non-structural defects – 2 years from the date of completion.
  • Structural defect – 6 years from the date of completion.

Does my insurance cover strata defects?

Strata defects are covered by the insurance fund, however, the claim must be issued on behalf of the Owners Corporation. Such claims may be complex, as they require approval of the Owners Committee or the Strata Plan. Our lawyers are able to streamline the process by addressing owners’ queries, assisting in preparation of the necessary documentation for the Committee and preparation and lodgement of the claim.

Where can I go for help?

Fill out the enquiry form to the right to find out how we can assist you in lodging your insurance claim or otherwise contact us on 02 9307 8900.