Residential Building Insurance in the ACT

What it is

Residential building insurance in the ACT is the last resort cover a licensed builder must hold before starting insurable residential building work. It is sometimes called home warranty insurance or builders warranty insurance. The scheme sits under the Building Act 2004 (ACT) and is overseen by the Construction Occupations Registrar through Access Canberra.

Cover takes one of two forms. It is either an insurance policy issued by an authorised insurer in accordance with section 90 of the Building Act 2004, or a fidelity certificate issued by an approved fidelity fund scheme. QBE Insurance is currently the only authorised insurer writing this cover in the ACT. The Master Builders Fidelity Fund is currently the only approved fidelity fund scheme under the Act. The fund is a private sector not-for-profit enterprise rather than a government business, though the ACT Government holds a regulatory oversight function over it.

When cover is required

Cover is required for building work on houses and apartment buildings of three storeys and below, not counting a car park. The trigger is a cost of $12,000 or more. Below that figure the work sits outside the scheme.

The same $12,000 figure carries the statutory warranty. Residential building work that requires a building approval and costs $12,000 or more is taken to carry a warranty implied into the contract, whether or not anyone writes it in, and any contract term that tries to limit that warranty is void. Structures you cannot live in, such as swimming pools, driveways and fences, sit outside it.

The cover amount and the claim window

Until the end of 2024 the minimum insurance amount was $85,000. A 2024 ACT Government review of the regulatory settings found that figure had fallen well behind construction costs and contracting practice. From 1 January 2025 the minimum insurance amount is $200,000, and the time limit to lodge a claim moved from 90 days to 180 days.

The 180 days runs from the point the homeowner becomes aware that the builder has become insolvent, died or disappeared. Those are the triggers the ACT Government names. The cover is last resort. It does not respond because the builder is slow, argumentative or refusing to come back. While the builder is alive, findable and solvent, the owner has the statutory warranty and the disputes pathway, not the policy.

The cover follows the building. It protects the current owner and any future owner if the property is sold.

How long the warranty runs

The statutory warranty operates for six years after the completion day for a structural element of the building, which includes components of external walls such as weatherproofing. It operates for two years after the completion day for a non-structural element. The completion day is the day the work is completed or the day the contract relating to the work ends, whichever is later.

A buyer picks up the balance of the period, not a fresh one. Buy four years after completion and you have two years of structural warranty left.

The owner-builder gap

This is the part that catches ACT buyers. Work carried out by a licensed owner-builder does not attract the statutory warranty, and owner-builders do not have to hold residential building work insurance. A buyer of an owner-built home in the ACT therefore has neither the warranty nor the policy standing behind the work. The same carve-out applies to work carried out by or for the Territory or the Commonwealth.

What an ACT builder actually has to do

• Obtain complying residential building work insurance or a fidelity certificate before applying to the certifier for a building commencement notice and before starting work
• Give the owner evidence of the cover and make sure the builder name and the cost of the work on the document are accurate
• Lodge a copy of the policy or fidelity certificate with the Construction Occupations Registrar
• Check the cover amount against the actual contract sum, because a complying policy pays the prescribed minimum or the cost of each dwelling forming part of the work, whichever is less

The certifier is the gate. Where residential building work requires insurance, the building certifier must confirm the cover is in place before issuing a building commencement notice. No cover means no commencement notice, and no commencement notice means the work cannot lawfully start.