Builders Warranty Insurance on the Sunshine Coast: Peace of Mind for Homeowners and Builders

Introduction

Building or renovating a home is one of the biggest financial commitments most people will ever make. Homeowners put their trust in builders to deliver quality workmanship, while builders take on responsibility for projects that can involve hundreds of thousands of dollars.

But what happens if a builder cannot complete the work due to insolvency, death, or disappearance? Or if defects arise that the builder cannot fix?

That’s where Builders Warranty Insurance comes in. For homeowners and builders across the Sunshine Coast, Buderim, Maroochydore, and surrounding regions, this cover provides peace of mind and compliance with Queensland’s building regulations.

At Design Cover Insurance Brokers, we help builders and property owners navigate the rules, understand requirements, and arrange suitable Builders Warranty Insurance policies.

What Is Builders Warranty Insurance?

Builders Warranty Insurance—sometimes called Home Warranty Insurance—is a compulsory form of cover for residential building projects above a certain contract value.

It protects homeowners if the builder cannot:

  • Complete the construction work.

  • Fix defects.

  • Honour contractual obligations due to insolvency, death, or disappearance.

In Queensland, this insurance is overseen by the Queensland Building and Construction Commission (QBCC). Builders must arrange the policy before starting work on eligible residential projects.

Why Is Builders Warranty Insurance Important?

For Homeowners

  • Provides security that defects or incomplete work will be rectified, even if the builder is unable to do so.

  • Ensures compliance with Queensland building laws.

  • Offers peace of mind when investing in a major construction or renovation project.

For Builders

  • Mandatory for residential projects over the threshold value (currently $3,300 in Queensland).

  • Builds trust with clients by demonstrating professionalism and compliance.

  • Reduces disputes by providing a safety net if unforeseen circumstances arise.

Without this insurance, builders may face penalties, and homeowners risk being left without financial protection.

What Does Builders Warranty Insurance Cover?

Typical inclusions are:

  • Non-completion – if the builder cannot finish the project due to insolvency, death, or disappearance.

  • Defective work – covering structural defects and certain non-structural issues within the statutory period.

  • Subsidence or settlement – protection against serious issues affecting the property’s stability.

  • Other building defects – depending on policy and jurisdiction, cover may extend to fixtures, fittings, or waterproofing.

Cover periods usually extend for:

  • 6 years and 6 months for structural defects.

  • 12 months to 2 years for non-structural defects.

Real-Life Scenarios on the Sunshine Coast

  1. Builder Insolvency in Buderim
    A builder working on a $400,000 new home becomes insolvent mid-project. Builders Warranty Insurance ensures the homeowner is financially protected and the project can be completed by another licensed builder.

  2. Defective Work in Maroochydore
    After moving into a renovated home, structural issues arise. The original builder has since passed away. The warranty insurance covers the cost of rectification.

  3. Incomplete Renovation in Sunshine Coast Hinterland
    A major renovation is left unfinished when the builder disappears. The homeowner’s policy provides compensation for the cost of completing the work.

Who Needs Builders Warranty Insurance?

This insurance is required for:

  • Licensed builders – undertaking residential building projects above the contract threshold.

  • Owner-builders engaging contractors – depending on project size and requirements.

  • Homeowners – should confirm their builder has arranged the insurance before work begins.

Projects that typically require cover include:

  • New homes.

  • Renovations and extensions.

  • Structural alterations.

  • Some non-structural projects above $3,300 in value.

What’s Not Covered?

Exclusions vary but may include:

  • Wear and tear or lack of maintenance.

  • Damage from natural disasters (covered under property insurance).

  • Work outside the statutory period.

  • Defects caused by homeowner alterations after completion.

That’s why it’s important for both builders and homeowners to fully understand the scope of cover.

How Much Does Builders Warranty Insurance Cost?

Premiums are calculated based on:

  • Contract value.

  • Type of work.

  • Location of the project.

For example, a new build in Maroochydore valued at $500,000 will attract a higher premium than a small renovation in Buderim worth $20,000.

While premiums add to project costs, they are a mandatory safeguard that protects both builders and homeowners.

Compliance Requirements in Queensland

In Queensland, Builders Warranty Insurance is managed by the QBCC. Key requirements include:

  • Insurance must be taken out before building work starts.

  • Applies to most residential projects over $3,300 in value.

  • Builders are responsible for arranging the cover on behalf of homeowners.

  • Homeowners should receive a copy of the insurance certificate.

Failure to comply can result in significant fines for builders.

Why Work With Design Cover Insurance Brokers?

Builders Warranty Insurance can be confusing, especially for first-time homeowners or small building businesses. At Design Cover, we:

  • Guide builders through QBCC compliance requirements.

  • Explain policy inclusions, exclusions, and timeframes.

  • Assist homeowners in checking cover is in place before work begins.

  • Help builders manage their insurance obligations efficiently.

Based on the Sunshine Coast, we understand the local construction market and support both homeowners and builders in Buderim, Maroochydore, Noosa, and Caloundra.

The Difference Between Builders Warranty and Other Insurance

It’s easy to confuse Builders Warranty Insurance with other types of cover. Key differences include:

  • Public Liability Insurance – protects against third-party injury or property damage during construction.

  • Contract Works Insurance – covers construction projects against risks like fire, theft, or storm damage during the build.

  • Builders Warranty Insurance – specifically covers homeowners if the builder cannot complete the work or rectify defects.

Each type plays a role, but warranty insurance is the one legally required for residential building contracts.

Conclusion: Building with Confidence

For homeowners, building or renovating is an exciting milestone. For builders, it’s an opportunity to deliver quality and trust. But without Builders Warranty Insurance, both parties are exposed to unnecessary risk.

Across the Sunshine Coast, Buderim, and Maroochydore, this cover ensures projects are completed, defects are addressed, and investments are protected.

At Design Cover, we help builders and property owners understand their obligations and secure the right policy, giving everyone confidence in the building process.

📞 Call Tanya today on 0419 550 677
📧 Email hello@designcover.com.au