What Is the QBCC Home Warranty Insurance Premium?

The QBCC (Queensland Building and Construction Commission) home warranty insurance is a premium paid to insure the construction work of a residential building or renovation project.

A premium refers to the amount of money paid for an insurance policy to cover a variety of risks. For the QBCC home warranty insurance, the premium amount must be paid before work begins by your contractor (who collects the money from you). Any residential construction work valued over $3,300 is required to pay the QBCC Home Warranty Insurance Premium.

Understanding the QBCC Home Warranty Insurance Premium is essential if you're building or renovating in Queensland. Know what you’re really covered for and how to avoid any penalties.

What’s covered under the QBCC Home Warranty Insurance Premium?

The QBCC Home Warranty Insurance Premium covers the homeowner in the event of something going wrong during the building process – generally if the project is unfinished, has defects, or if the contractor disappears or passes away.

You must lodge a non-completion claim if your contractor does not or can not finish the work you contracted them to do or if your contractor does not fix defects. This claim must be lodged within 3 months after the contract ends. If the QBCC accepts your claim and the building project is damaged by fire, storm, vandalism, or theft, or if the building suffers from subsidence or settlement – the claim can still be liable. Once the QBCC pays the claim, they will attempt to recover the amount they paid to finish or fix the project from the contractor.

The QBCC Insurance is attached to the property for 6 years and 6 months from when the contract is signed or from when the premium is paid, even if the property is sold. This means that non-structural defects are still covered by the QBCC 6 years and 6 months after the construction work is completed even if homeowners change.

How much is the QBCC Home Warranty Insurance Premium?

The QBCC Home Warranty Insurance Premium cost is calculated by adding the value of materials, labour, GST, and includes any associated work in your contract. Associated work can include landscaping, driveways, fences, retaining walls, hot water systems, security doors, or air conditioning. 

The Home Warranty Premium is paid for projects valued over $3,300, with the QBCC premium increasing in $1,000 increments over this $3,300 threshold. For example, a project with an insurable value of $4,000 must pay a premium of $214.85 and a $5,000 project is required to pay a premium of $222.00.

Projects that are valued more than $150,000 must pay a QLeave Levy in addition to the Home Warranty Premium. The QLeave Levy is a portable long service leave scheme required for all construction work in Queensland.

Who pays the QBCC Home Warranty Insurance Premium?

The licensed builder contracted for the project must pay the QBCC premium. The premium amount is included in the contract price, so your contractor will collect the premium amount from you and pay it on your behalf – protecting the project from defective or incomplete work and ensure commitment to the contract.

If your project requires additional insurance after the standard premium is paid, you can pay it yourself without going through your contractor as the homeowner. Additional cover must be paid either within 30 business days of the contract start day or before any work is done – whichever is earlier.

The QBCC Home Warranty Insurance begins once the premium is paid, the contract is signed, or when any construction work begins.

What happens if the QBCC Home Warranty Insurance Premium is not paid? 

If your residential construction project is valued over $3,300 and you haven’t paid the QBCC Home Warranty Insurance Premium before any work begins – your contractor can face penalties.

It is your contractor’s responsibility to calculate the QBCC premium and pay it to the QBCC – so if the premium is not paid, the contractor will face the penalties, not the homeowner. Penalties for not paying the QBCC premium include fines, demerit points, a suspended or cancelled licence, or a public record of their offences and demerit points.

In the case where the contract isn’t documented properly or the contract does not have a written agreement by the homeowner – penalties can also apply. As a homeowner, you are entitled to a “cooling-off” period which allows you to withdraw from the contract within this time. If the contractor does not comply with documenting the project properly, the “cooling-off” period can be extended up to 6 months.

Navigate the QBCC Home Warranty Insurance Premium with John Munro Builders

John Munro Builders specialises in building new homes, renovations, home extensions, and luxury properties in Townsville. Our multi-award winning team of builders understand the ins and outs of the QBCC Home Warranty Insurance Premium. We can help you obtain the QBCC Insurance and help you know what you’re covered for. If you’re building or renovating a home in Townsville, contact the friendly team at John Munro Builders to get started.