Fixed-price residential contracts can support both non-completion and defective-work claims, while cost-plus contracts are covered only for defective work. The Queensland Building and Construction Commission (QBCC) page updated 11 May 2025 says home warranty insurance is compulsory for residential construction work valued at more than $3,300, including materials, labour and GST, and pays up to a maximum of $200,000 on claims (figures checked 1 October 2026).
What do the QBCC’s key figures mean?
The Queensland Government administers the Queensland Home Warranty Scheme through the QBCC.
| QBCC rule | Current position |
|---|---|
| Compulsory insurance | Required for residential construction work valued at more than $3,300, including materials, labour and GST. |
| Maximum claim payment | Home warranty insurance pays up to a maximum of $200,000 on claims, subject to limitations and some exclusions. |
For eligible residential work, the contractor collects the premium from the homeowner and pays it to the scheme. The premium must be included in the contract and paid before work begins. QBCC also recommends including it in each quote for a project over the threshold so quotes can be compared accurately.
Which claims can each contract type support?
| Residential contract type | Non-completion claim | Defective-work claim |
|---|---|---|
| Fixed-price | Can be covered. A non-completion claim requires a fixed-price residential contract with a licensed contractor. | Can be covered. |
| Cost-plus | Not covered. | Can be covered, but defective work is the only claim category QBCC identifies as covered for cost-plus contracts. |
Home warranty insurance is not necessarily absent from a cost-plus project. The premium insures residential construction work under both fixed-price and cost-plus contracts, but the available claim protection differs. A cost-plus contract may therefore support a defective-work claim without supporting a non-completion claim.
Why does an uncertain final price matter?
To settle a non-completion claim, the scheme needs to know the amount agreed under the contract to finish the work. A cost-plus contract has no certainty about the final price, so the QBCC says it cannot quantify whether the homeowner has suffered a loss.
The difficulty is therefore not simply that the final account may increase. Without a certain final price, the scheme may have no reliable contractual amount against which to quantify the non-completion loss.
What does the QBCC recommend?
The QBCC’s instruction is direct: “Only use fixed-price residential contracts.”
Its homeowner guide updated 24 Jan 2025 says cost-plus contracts can be complex and often lead to misunderstandings about home warranty insurance. The QBCC strongly recommends avoiding them to protect homeowners and licensees because they can limit Scheme protections.
A cost-plus contract may still require home warranty insurance, but it does not provide the same claim protection as a fixed-price contract.
What should you check before work starts?
- Contract type and licence: Check that the document is a fixed-price residential contract. A Scheme non-completion claim requires a fixed-price contract with a licensed contractor.
- Premium: Confirm that the home warranty insurance premium is included in the quote and contract, and is paid before work begins.
- Payments: Cover can be affected if you pay the contractor more than the law or contract allows.
- Scope: Home warranty insurance applies only to residential construction work. It does not cover commercial building projects and is not home and contents insurance.
- Contractor changes: Home warranty insurance cannot be transferred between contractors.
What events can support a claim?
| Event | Claim position described by the QBCC |
|---|---|
| The contractor does not, or cannot, finish the contracted work | This may support a non-completion claim, subject to the fixed-price and licensed-contractor requirements. |
| The contractor does not fix defects | This may support a defective-work claim. |
| The building suffers subsidence or settlement | A claim may be made. |
| The project suffers fire, storm, vandalism or theft after a non-completion claim is accepted | The relevant provision applies when the insurer has accepted the non-completion claim and the building project is damaged by one of those events. |
These are possible claim grounds, not automatic payments. Claims remain subject to the applicable limitations and exclusions.
How long does cover last, and what can limit it?
- General cover period: The main QBCC scheme information states that cover lasts for 6 years and 6 months from the earliest of contract entry, premium payment or commencement of work.
- Structural and non-structural work: The QBCC homeowner guide describes structural-defect cover as generally lasting for 6 years and 6 months from the contract date, while non-structural work is typically covered for around six months from completion. The QBCC says these are general timeframes and specific circumstances may vary.
- Longer projects: If residential construction work took more than six months to complete, cover can be extended by 6 months from the cover commencement day.
- Claim timeframes: The time allowed for making a claim depends on the type of claim.
- Expiry: Cover cannot be renewed after it expires.
- Sale of the home: Insurance remains in place if the home is sold because it covers the property. A home buyer or the buyer’s legal agent can search for insurance attached to the property.
- Recovery from the contractor: After paying a claim, the scheme tries to recover the amount paid to finish or fix the work from the contractor.
This is general information, not financial or legal advice. Before signing a contract or making a claim, check the current QBCC regulator page and the policy’s PDS.
Sources
- What is home warranty insurance | Queensland Building and Construction Commission
- Home warranty insurance: A guide for homeowners | Queensland Building and Construction Commission
FAQ
Can I make a non-completion claim if my contract is cost-plus?
No. The QBCC says a Scheme non-completion claim requires a fixed-price residential contract with a licensed contractor. Cost-plus contracts are covered only for defective-work claims.
Are defective-work claims available for both contract types?
Potentially. Fixed-price and cost-plus contracts can both be covered for defective work, but the claim remains subject to the applicable limitations and exclusions.
Does selling the home end home warranty insurance?
No. The insurance covers the property and remains in place if the home is sold. A buyer or the buyer’s legal agent can search for any insurance attached to the property.
What should I check before signing a residential building contract?
Check the contract type, the contractor’s licence, whether the premium is included in the quote and contract, and how payments will be made. Before relying on cover or making a claim, check the current QBCC page and the policy’s PDS.
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