In Victoria, domestic building insurance (also known as Builders Warranty Insurance) is managed by a state-directed home insurance fund called the Victorian Managed Insurance Authority (VMIA). Generally mandatory when building a new home, it may also be required for renovations and extensions too, depending on the value of the required works. Duncan Thompson Extensions is one of Melbourne’s premier home renovation and extension companies, with a reputation for providing high quality workmanship, innovative design and value for money. If you are building or renovating you have probably heard a lot about insurance, but what exactly is domestic building insurance? What does it cover and who is responsible for organising it? Let’s take a look at everything you need to know.

What is Domestic Building Insurance (DBI)?

Known by a variety of different names including Home Warranty Insurance and Builders Warranty Insurance, DBI is a statutory product, compulsory in most states for builders carrying out residential building work. The cover lasts up to 6 years from the completion of the project or termination of the domestic building contract, and this is split into 2 parts – 6 years cover for structural defects and 2 cover years for non-structural.

Structural defects may consist of:

  • Foundations
  • Floors
  • Waterproofing
  • Roofs
  • External walls and internal load bearing walls
  • Beams

Non-structural defects may include:

  • Painting
  • Blocked or broken pipework
  • Brickwork
  • Internal walls and doors
  • Joinery

The exact length of the cover provided will depend on which state you’re building in so it’s always a good idea to double check with the relevant authority in your state.

What Does It Cover?

DBI is designed to provide cover to protect the homeowner (and subsequent homeowners) under circumstances where the contracted building work is incomplete or defective in the event that the builder:

  • dies
  • disappears
  • becomes insolvent/bankrupt during construction
  • has failed to respond to a rectification order within 30 days of it being issued
  • is deregistered

Is It Mandatory?

In Victoria, Domestic Building Insurance is mandatory cover for all domestic building projects including new builds, renovations and extensions where the contract price is over $16,000.

How Do I Get DBI?

It is the responsibility of the home builder to purchase the insurance for the building project on behalf of the homeowner. Generally, it’s necessary for the builder to have arranged domestic building insurance before they take any payment (including deposits) under a building contract and before starting any work under that contract.

Other Important Insurance a Home Builder Should Have

An important indicator that you’ve found a high-quality builder is if they’re fully licensed and insured. In addition to DBI, common examples of insurance a builder should have include

  • Public Liability Insurance
  • Workers Compensation Insurance
  • Contract of Works Insurance

When looking for a domestic builder to undertake your home extension or home renovation in Melbourne, it’s important to ask about their license and insurance. A good builder will always be able to provide you with these details upon request and will have no hesitation in doing so. It’s essential that you and your builder are covered in the unlikely event that something goes wrong with the building process.

If you are looking to start a home renovation or extension in Melbourne, we are a trusted Melbourne building company with over 30 years’ experience delivering high quality workmanship across the inner, eastern, south-eastern and bayside suburbs. Registered with both the HIA and MBVA and offering extended warranties to guarantee our quality, there’s no better choice than the Duncan Thompson Extensions team for your home extension project. Call us today on (03) 9836 8655 or enquire online now.