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What is HBCF Home Warranty Insurance?

Home Building Compensation Fund (HBCF) cover (formerly called ‘Home Warranty Insurance’) is needed if you’re a licensed builder or tradesperson in New South Wales and you’re about to undertake a home building project valued at $20,000 or more, including GST. As a builder, you are legally required to give proof of HBCF cover to the homeowner or developer you are working for before you start work or ask for a deposit or any other payment.

Key Highlights

Home Building Compensation Fund cover acts as a safety net for homeowners in New South Wales so they don’t suffer financial loss as a result of incomplete and defective work carried out by a builder or tradesperson who disappears, dies, becomes insolvent or has their licence suspended. It’s a statutory product required by law.

  • HIA Insurance Services can provide 24-48 hour delivery of certificates to your business1
  • Homeowners can be compensated up to $340,000 for six years from date of completion of major/structural works
  • The same amount applies for two years from date of completion of minor/non-structural works
 
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Why might I need HBCF Home Warranty Insurance?

Failure to take out HBCF cover is an offence under New South Wales law. Cover acts as a protection for the homeowner against financial loss suffered by them (and any subsequent owner, as long as the policy has not been exhausted by a prior claim) when a builder or tradesperson can’t complete contracted work or meet a valid claim for defective or unsatisfactory building work. This can happen when that person:

  • dies
  • disappears
  • becomes insolvent
  • has had their licence suspended due to non-compliance with an order by the NSW Civil and Administrative Tribunal or court to pay the homeowner money

The cover also applies if the builder is trading through a business entity which ceases to exist or becomes insolvent.

You need to confirm eligibility before you can take out HBCF cover, which is offered by a single insurer operated by the NSW government – icare HBCF. Once icare has undertaken a risk assessment and determined your builder rating, you can then apply to obtain a Certificate of Insurance for a building project you intend to take on.

It’s important to note that you must provide this Certificate of Insurance to the homeowner or developer before you start work or request a deposit.

Applying for a HBCF Home Warranty certificate

When applying for your HBCF certificate, you will be required to state the construction type for your project. Construction types are split into primary projects and secondary projects:

In NSW, builders can also apply for HBCF Certificates of Insurance online. Click below to find out more about the icare HBCF Self-Service Portal. 

The HBCF Self-Service Portal

The HBCF Builder Self-Service Portal is a convenient alternative to applying for your Certificates of Insurance. The HIA Insurance Services team will still need to review and approve your application prior to binding your certificates.

What will I be using the portal for?

1. Applying for Certificates of Insurance

You can now apply for your HBCF Certificate of Insurance for new jobs online and track your applications through the self-service portal.

2. Complete a job

You can also complete an open project by selecting the policy number of an open job and adding a completion date to close the job.

3. View important information
  • Eligibility assessment results
  • Certificate of eligibility
  • Next scheduled eligibility assessment
  • Summary of current projects
  • Snapshot of your maximum job allowance capacity
  • Quote on future insurance premiums
  • Current certificates of insurance  

How do I get access to the portal?

To gain access, you will need to appoint a self-service portal manager within your business and send us their full name, mobile number and email address to au.hiais@aon.com. The portal manager can then appoint clerical users in your business to perform basic tasks, who will not have access to sensitive information about your business.

As your broker, we will arrange to have HBCF provide your self-service portal manager with their login details.

Visit the icare website to find out more and take a look at the portal.

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What is covered under HBCF Home Warranty Insurance?

Maximum contract value

In the case of major or structural defects, HBCF cover up to $340,000 is claimable for a period up to six years from the completion of the project. For minor or non-structural defects, homeowners can claim up to $340,000 for a period up to two years from completion. Homeowners becoming aware of the defects in the last 6 months of the period of insurance may claim within 6 months of awareness of the defect(s).

Failure to commence

The Home Building Compensation Fund provides cover in the event that work isn't started by the builder, leading to a loss of deposit under the building contract. This is claimable by the homeowner for up to 12 months from the failure to commence the work.

Failure to complete

Up to 20 per cent of the contract price is claimable if the builder fails to complete the work. It is claimable up to 12 months from cessation of the work.

Why HIA Insurance Services?

HIA Insurance Services (HIAIS) combines the construction industry expertise of the Housing Industry Association (HIA) with the risk and insurance knowledge of Aon to provide products and advice that are specific to the residential construction industry.

We understand the unique risk exposures of builders, tradies and subcontractors in New South Wales. As one of the largest and most experienced insurance providers in the country, we can offer our customers cost-effective policies tailored for risks commonly found in the construction sector, as well as fast and efficient claims processes.

Our specialist brokers can help building sector professionals by managing complex paperwork on their behalf. HIA Insurance Services can work with your business to:

  • arrange efficient 24–48 hour delivery of a Certificate of Insurance1
  • advocate for builders by providing specialist advice and attending to appeals to the underwriter, icare HBCF
  • arrange eligibility submissions for new builders by managing HBCF policies on their behalf

 
Frequently Asked Questions
View all

The homeowner warranty certificates will take 24–48 hours to be processed, but backlogs can sometimes cause a delay.

Yes, it’s quicker to gain approval when you provide all the necessary documents from the outset.

The NSW government uses a complex model to ensure that your business is eligible for HBCF cover. You need to get a Certificate of Eligibility before you can apply for insurance cover. A Certificate of Eligibility means you’ve been assessed by icare and have been granted an entitlement to apply for a Certificate of Insurance.
You can apply for eligibility through an approved Home Warranty Insurance distributor, of which HIA Insurance Services is one. To find out more about the application process and the documents you need to provide, visit the State Insurance and Regulatory Authority (SIRA) website.

The short answer is that it’s a legal requirement to have it.
If you’re a licensed builder or tradesperson in New South Wales, you must take out HBCF cover for every home building project you undertake valued at $20,000 or more, including GST. If you fail to do so, you can’t enforce the building contract against the owner and you may be liable to substantial fines.

The New South Wales government does not disclose its pricing model, so it’s difficult to determine the exact fees payable by each business to receive cover. However, to understand the distributor related fees that HIA Insurance Services charges, we have created a user-friendly HBCF premium calculator which you can request by calling us on 1800 762 878

You can view all the fees and charges related to Home Warranty HBCF insurance by clicking here.

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