Whether you’re building or renovating a home, knowing how Domestic Building Insurance operates in Victoria is an extremely powerful asset and one that is commonly misunderstood by homeowners.

Do I need to use a registered builder?

When building or renovating a home where works exceed $10,000, you must ensure that you engage a registered building practitioner to complete the works. There are a number of important reasons for this, none more so than the stringent compliance and insurance requirements domestic builders in Victoria are held to and the protections afforded to you as a homeowner as a result of these requirements.

To check if your builder is registered, simply click on the link below and type in your builder’s name.

https://www.vba.vic.gov.au/tools/find-practitioner

Does my builder need to provide Domestic Building Insurance?

Domestic Building Insurance (DBI) must be provided by a registered building practitioner when construction works exceed $16,000 (including labour and materials). Depending on the value of the construction works and the builder’s insurance policy, DBI can cover rectification costs of up to $300,000.

Prior to commencing works and taking any deposit, builders are required to provide you with a copy of their insurance policy and a certificate of currency covering the property. It is vital that you hold on to these documents as you may need to refer to them in the future.

When does Domestic Building Insurance commence and how long does it last?

DBI insurance commences on the day that a building surveyor issues either:

a Certificate of Occupancy (for new builds); or
a Certificate of Final Inspection (for renovations and extensions).

DBI insurance runs for a statutory period of six (6) years for structural defects, and two (2) years for non-structural defects.

One major point to note is that DBI runs with the home or construction works themselves and not with the homeowner. This means that regardless of how many times the home is sold within the statutory period, DBI insurance will remain in effect during this time and will continue to cover the construction works until it expires. This is a particularly relevant consideration for incoming purchasers of property.

Can I claim on my builder’s Domestic Building Insurance?

You cannot claim against your builder’s DBI unless your builder:

dies;
goes bankrupt; or
goes missing.

If you have an issue with your builder or the works they have undertaken, try to resolve the dispute by taking the below steps:

Discuss through the issues with your builder. During these conversations, keep notes of what is agreed and disagreed upon.
Detail your concerns in writing and request a formal response from your builder.
If a solution still cannot be found, engage a lawyer to write to your builder on your behalf to assert your legal position in the dispute.
Should an agreement not be reached, ask your lawyer how to commence an application for dispute resolution through Domestic Building Dispute Resolution Victoria (DBDRV).
If all else fails, commence formal legal proceedings against your builder.

How we can help:

If you have any questions about Domestic Building Insurance or you are having issues with your builder, set up a time with the Property, Projects and Construction team at Merton Lawyers. We are experts in dealing with all aspects of construction law, including:

Building contract reviews and negotiations
Dispute resolution and litigation
Domestic Building Insurance and Owner Builder’s Warranty Insurance claims
Advice under the Domestic Building Contracts Act 1995 (Vic) and the Building and Construction Industry Security of Payment Act 2002 (Vic)

Talk to our team