New Construction vs. Renovation: Insurance Requirements

Insurance Requirements for New Construction

When building a new home in Queensland, QBCC home warranty insurance is mandatory for all residential construction work valued at $3,300 or more. This insurance provides protection for homeowners against:

• Non-completion of building work
• Defective building work
• Subsidence or settlement

For new construction, the insurance coverage period is typically:

• Non-completion: 12 months from the date of contract
• Structural defects: 6 years and 6 months from either the contract date or when the premium is paid
• Non-structural defects: 12 months from practical completion

Insurance Requirements for Renovations

For renovation projects, the insurance requirements depend on the nature and value of the work:

Renovations Valued at $3,300 or More

QBCC home warranty insurance is mandatory for renovation work valued at $3,300 or more that involves:

• Structural changes to the building
• Addition of new rooms or extensions
• Major kitchen or bathroom renovations that involve plumbing or electrical work

Exemptions for Certain Renovation Work

Some renovation work may be exempt from insurance requirements, including:

• Painting (interior or exterior)
• Tiling (when not part of a bathroom renovation)
• Landscaping (when not part of a structural retaining wall)

Premium Calculation Differences

New Construction Premiums

For new construction, premiums are calculated based on the total contract value, including all building work and materials. The premium rate is typically between 0.5% and 1.5% of the contract value.

Renovation Premiums

For renovations, premiums are calculated based on the value of the renovation work only. The premium rate structure is the same as for new construction, but since the contract value is typically lower, the premium amount is usually lower as well.

Documentation Requirements

New Construction

For new construction, the builder must provide:

• A signed building contract
• Detailed plans and specifications
• Building approvals from the local council

Renovations

For renovations, the documentation requirements may be less extensive, depending on the scope of work:

• A signed contract describing the renovation work
• Plans and specifications (for major renovations)
• Building approvals (if required for the specific renovation)

For more information on insurance requirements for your specific project, use our QBCC Premium Calculator or consult with a licensed builder.