Domestic building insurance
Domestic building insurance is provided by a builder when the cost of building work under the contract with the builder is more than $16,000 (including labour and material costs). A claim against the builders Warranty Insurance can only be made should the builder die, go bankrupt or otherwise cannot be found.
If a property owner sells their house within six years of the completion of building work, domestic building insurance, whether provided by an owner-builder or a registered building practitioner, will cover the purchaser of that property.
Owner-builders are required under Section 137B of the Building Act 1993 to provide Warranty Insurance for building work they have carried out on their property if the value of the work was $16,000 or greater for the remainder of the six year period.
It is important that owners understand that the insurance policy is for the benefit of the purchaser and that the owner-builder or registered builder will be responsible for ensuring that the building work complies with the relevant legislation at the time of construction.
Please note: Domestic building work more than $16,000 (previously $12,000) will require domestic building insurance and will cover costs up to $300,000 (previously $200,000) to fix structural defects for six years, and non-structural defects for two years from 1 July 2014.