Domestic Building Insurance (DBI) in Victoria: when residential builders must hold cover

The scheme changed on 1 July 2026

Victoria replaced Domestic Building Insurance (DBI) with a new first-resort Home Warranty scheme on 1 July 2026. Which scheme governs a job depends on the date the building contract was signed.

• Contracts signed on or after 1 July 2026 are covered by Home Warranty. It is mandatory for domestic building work valued at more than $20,000 on buildings up to three storeys, the cover cap is $400,000 per home and it is first resort. A homeowner can claim where the work is incomplete, defective or non-compliant and the builder is unable or unwilling to complete or fix it. The Building and Plumbing Commission (BPC) is the sole provider and the private DBI market closed from 1 July 2026.
• Contracts signed before 1 July 2026 stay on DBI. Every DBI Certificate of Insurance issued before that date continues on its existing terms, so the DBI detail below remains live for the large stock of pre-1-July-2026 work. DBI cover does not transfer to Home Warranty.

The rest of this entry sets out DBI, the legacy scheme that still governs pre-1-July-2026 contracts.

What Domestic Building Insurance is

Domestic Building Insurance (DBI) is the statutory last-resort consumer protection scheme that backed residential building work in Victoria under contracts signed before 1 July 2026. It is the Victorian equivalent of the Home Building Compensation Fund (HBCF) in NSW.

DBI is now issued by the Building and Plumbing Commission (BPC), which took the DBI function over from the Victorian Managed Insurance Authority (VMIA) on 1 July 2025 and manages every DBI policy issued by QBE on behalf of VMIA since 31 May 2010. It is governed by the Building Act 1993 (Vic) and the Domestic Building Insurance Ministerial Order.

When DBI was mandatory

DBI was legally required for domestic building projects in Victoria where the contract price exceeded $16,000 incl GST and the contract was signed before 1 July 2026. Builders had to hold a DBI policy before asking for or receiving any payment under a major domestic building contract.

The $16,000 threshold applied to the total contract price for residential building work. Below it, DBI was not required, although the statutory warranties under section 8 of the Domestic Building Contracts Act 1995 still apply. For contracts signed on or after 1 July 2026 the equivalent trigger is the Home Warranty threshold of more than $20,000.

Builder eligibility

DBI was never available to any builder on demand. Builders had to hold an eligibility profile with the insurer, assessed on financial capacity, building experience, claims history and the construction categories the builder wanted to take on. The same eligibility discipline carries into Home Warranty, which the BPC administers through the BuildVic portal.

Once eligible, the builder was approved to purchase cover for specific projects up to defined limits, both per-project value and total concurrent exposure. A builder who lost or failed to renew eligibility could not enter new major domestic building contracts, because the contract required the certificate before any deposit or work began. Eligibility is the practical gate to operating as a residential builder in Victoria under either scheme.

What DBI covers

DBI is a last-resort policy. It responds to incomplete or defective work where the builder cannot make good because the builder:

• has died
• has disappeared
• has become insolvent
• (for policies issued on or after 1 July 2015) has failed to comply with a VCAT order or court order to rectify or pay the homeowner

This is the key point of difference from the scheme that replaced it. Home Warranty is first resort and responds where the builder is unable or unwilling to complete or fix the work. DBI does not. Under a DBI policy the homeowner must first attempt rectification through the builder, then dispute resolution at DBDRV and VCAT, before the policy is triggered.

DBI cover is capped at $300,000 per Certificate of Insurance for policies issued on or after 1 July 2014, and $200,000 for policies issued before that date. Non-completion is limited to 20 per cent of the contract price inside that cap. Structural defects are covered for six years and non-structural defects for two years. A claim generally has to be lodged within 180 days of the homeowner becoming aware of the trigger event. Cover passes to a subsequent owner during the warranty period.

The multi-storey position

DBI did not apply to residential buildings of more than three storeys above ground level containing two or more separate dwellings. Home Warranty keeps the same carve-out, applying to buildings up to three storeys and excluding buildings of more than three storeys that contain more than two homes.

This mirrors the NSW HBCF carve-out for buildings of three storeys or more. The policy reason is the same, that consumer-protection statutory insurance was not designed to scale to commercial-style apartment construction. Class 2 apartment buildings in Victoria rely on other regimes such as the domestic building dispute framework and the Cladding Safety Victoria program for specific defect categories.

Owner-builder cover

An owner-builder who builds or substantially renovates their own home in Victoria and proposes to sell within six years and six months of completion must hold the required statutory insurance before signing the contract of sale, under section 137B of the Building Act 1993 (Vic). For owner-builder work carried out under a certificate of consent from 1 July 2026 that product is the new first-resort scheme, and for earlier work it is owner-builder DBI. The cover protects future buyers from the incomplete-or-defective-work risk. The detail sits in the section-137b-owner-builder-resale-vic entry.

Comparison to NSW HBCF

The differences between the Victorian scheme and HBCF (NSW) matter for builders working across both states.

Under DBI the Victorian threshold ($16,000 incl GST) was lower than the NSW threshold ($20,000 incl GST), so smaller jobs in Victoria were caught. From 1 July 2026 Home Warranty lifts the Victorian threshold to more than $20,000, which brings it into line with NSW.

Both schemes run through a single provider, the BPC in Victoria and icare in NSW. The biggest current difference is that Victorian Home Warranty is first resort, so a homeowner can claim for incomplete, defective or non-compliant work without waiting for the builder to die, disappear or become insolvent. HBCF in NSW remains a last-resort scheme. Both share the three-storey carve-out.

Practical implications for builders

Three things follow.

Know which scheme your contract sits under. A contract signed on or after 1 July 2026 needs Home Warranty at the more-than-$20,000 threshold. A contract signed earlier sits on DBI at the more-than-$16,000 threshold. Do not quote the old scheme on a new job.

Provide the insurance certificate before any payment. The certificate or notice of cover must be with the homeowner before a deposit is taken or work begins. Skipping this step is a Building Act offence and exposes the builder to enforcement.

Keep eligibility and reporting current with the BPC through BuildVic. The premium is per-project, calculated on contract value and risk profile. Late or unreported projects can attract penalty premiums.

Related entries

The statutory warranties the scheme ultimately backs are in the statutory-warranties-dbca-vic entry. The 10-year limitation period that bounds claims is in defects-liability-period-vic-v2. The owner-builder resale rule is in section-137b-owner-builder-resale-vic. The claims pathway is in vmia-claim-process-vic. The NSW HBCF equivalent is in hbcf-insurance-requirements-nsw.