According to the Queensland Building and Construction Commission (QBCC) guidance, updated 11 May 2025, Queensland home warranty insurance is compulsory for residential construction work valued at more than $3,300, including materials, labour and GST. The same QBCC guidance says the insurance pays up to a maximum of $200,000 on claims and that the contractor obtains the cover, collects the premium from the homeowner and pays it to the scheme before work begins; figures checked 1 October 2026.
When does the $3,300 threshold apply?
The QBCC uses the wording more than $3,300, not $3,300 or more. The value includes the relevant costs across the residential project.
| Check | QBCC rule |
|---|---|
| Type of work | Residential construction work only |
| Contract types | Fixed-price and cost-plus residential contracts |
| Project value | More than $3,300 |
| Costs included | Materials, labour and GST |
| Result | Home warranty insurance is compulsory |
For a project above the threshold, the premium should be included in each quote so the homeowner can compare the total prices accurately. The threshold is not based on labour alone.
Who obtains and pays the premium?
The Queensland Government administers the Scheme through the QBCC. Although the contractor pays the premium to the Scheme, the QBCC describes the amount as being collected from the homeowner and included in the homeowner’s contract.
- Contractor: Takes out the insurance through the Scheme and pays the premium to the Scheme.
- Homeowner: Pays the premium amount to the contractor as part of the contract.
- Timing: The premium is paid before work begins.
- Contractor obligation: A contractor must include the cost of obtaining the insurance or face significant penalties.
What claims can home warranty insurance cover?
The insurance covers the homeowner for loss if something goes wrong during the building process. The QBCC identifies several situations relevant to claims.
| Situation | Claim or protection described by the QBCC |
|---|---|
| The contractor does not, or cannot, finish the contracted work | Non-completion claim |
| The contractor does not fix defects | Defective-work claim |
| The building suffers subsidence or settlement | A claim may be available |
| A non-completion claim has been accepted and the project is damaged by fire, storm, vandalism or theft | The relevant provision applies |
A non-completion claim requires a fixed-price residential contract with a licensed contractor. Defective-work protection can apply to both fixed-price and cost-plus contracts.
Home warranty insurance pays up to a maximum of $200,000 on claims. Claims remain subject to limitations and some exclusions. After paying a claim, the Scheme tries to recover from the contractor the amount paid to finish or fix the work.
Why does the contract type matter?
The type of residential contract determines which claim protection is available.
| Contract type | Non-completion claims | Defective-work claims |
|---|---|---|
| Fixed-price residential contract | Available, including the licensed-contractor requirement | Available |
| Cost-plus residential contract | Not available | Available |
A cost-plus contract does not provide certainty about the final price. The QBCC says this means the Scheme cannot quantify whether the homeowner has suffered a loss for non-completion.
Because cost-plus contracts can limit Scheme protections, the QBCC does not recommend them for residential building work and says homeowners should use only fixed-price residential contracts.
What work is not covered?
The Scheme does not cover all building and construction work. Important boundaries include:
- Commercial building projects: Home warranty insurance does not cover commercial projects.
- Certain multiple dwellings: Building work in or for a multiple dwelling of more than three storeys is not residential construction work and is not insurable under the Scheme. A storey consisting mainly of a carpark is not counted for this test.
- Home and contents insurance: Home warranty insurance is a separate type of cover and is not home and contents insurance.
These points address the Scheme’s scope, but individual claims may also have other limitations or exclusions.
How long does the cover last?
| Issue | QBCC rule |
|---|---|
| Standard cover period | 6 years and 6 months |
| When the period begins | The earliest of contract entry, premium payment or commencement of work |
| Longer project | If the residential construction work took more than six months to complete, cover can be extended by six months from the cover commencement day |
| Sale of the home | The insurance remains in place because it covers the property |
| Buying the home | A buyer or the buyer’s legal agent can search for cover attached to the property |
| Changing contractors | The insurance cannot be transferred between contractors |
| Expiry | Cover cannot be renewed once it expires |
What else can affect a claim?
A claim must be made within a timeframe that depends on its type. Homeowners should therefore check the applicable regulator requirements and policy terms rather than assuming one deadline applies to every claim.
The QBCC also states that insurance is affected if the homeowner pays the contractor more than allowed by law or under the contract. The precise policy terms and claim requirements should be checked before making a payment or lodging a claim.
This is general information, not financial or legal advice. Check the QBCC regulator page and the policy’s PDS for the full terms before relying on the cover.
Sources
FAQ
Does the threshold mean $3,300 or more?
The QBCC’s published wording is more than $3,300. The calculation includes materials, labour and GST.
Who obtains and pays the home warranty insurance premium?
The contractor takes out the insurance and pays the premium to the Scheme. The amount is collected from the homeowner, included in the contract and paid before work begins.
Can I make a non-completion claim under a cost-plus contract?
No. Non-completion claims require a fixed-price residential contract with a licensed contractor. Cost-plus contracts are covered only for defective-work claims.
Are commercial projects or multiple dwellings over three storeys covered?
Commercial building projects are not covered. Building work in or for a multiple dwelling of more than three storeys is also not insurable, excluding a mainly carpark storey from the storey count.
How long does cover last, and does it continue if the home is sold?
Cover lasts for 6 years and 6 months from the earliest of contract entry, premium payment or commencement of work, with the stated extension for longer projects. It remains attached to the property if the home is sold, but it cannot be transferred between contractors or renewed after expiry.
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