Why Builder Insurance Matters More Than Your Home Insurance

Here's an uncomfortable fact: while your home is being built, your regular home insurance covers almost nothing. The protection you're relying on is your builder's insurance — and most homeowners never check it exists.

The Big One: HBC Cover

Home Building Compensation cover (the old "home warranty insurance") is mandatory in NSW for residential work over $20,000. It protects you if the builder becomes insolvent, disappears or dies before completing the job — covering incomplete work and defects up to $340,000.

The builder must give you the certificate of insurance for your specific project before taking any money — including the deposit. Not a sample. Not "it's being processed." The certificate, with your address on it.

The Supporting Cast

• Public liability: covers injury or property damage to third parties — your neighbour's fence, a visitor on site. $10–20 million cover is standard for legitimate builders.
• Contract works insurance: covers the partially-built home itself against fire, storm and theft until handover. Until that point, the build is the builder's risk — confirm it's insured.
• Workers compensation: protects the people building your home. Without it, an injured worker's claim can land on the property owner.

The Warranty That Outlives the Build

In NSW, statutory warranty runs 6 years for major (structural) defects and 2 years for other defects — from completion, automatically, by law. A builder who's still answering the phone in year five is the warranty that actually matters. Ask any builder how they handle defect callbacks, and ask for an example.