Your builder went broke, died or disappeared: the Victorian insurance claim, step by step

Property & tenancy · VIC

Victoria is mid-transition between two schemes: Domestic Building Insurance for contracts signed before 1 July 2026, and the broader Home Warranty for contracts after. Which one you claim under — and what it pays — depends on your contract date.

First: which scheme are you in?

The date on your building contract decides everything.

- Contract signed BEFORE 1 July 2026 (with a Certificate of Insurance issued before that date): you are under Domestic Building Insurance (DBI). Your cover continues under its original terms — it does not transfer to the new scheme. - Contract signed ON or AFTER 1 July 2026: eligible work over $20,000 falls under the new Home Warranty scheme run by the Building and Plumbing Commission.

And note who runs it: since 1 July 2025 the BPC administers this insurance. The VMIA no longer has any homeowner-facing building insurance role — its old DBI pages are gone. Paperwork pointing you to the VMIA is out of date, not wrong about your cover.

What DBI actually covers — narrower than most people think

The BPC's wording: for homes up to three storeys, DBI "has generally provided cover of up to $300,000 for loss suffered because your builder: died / disappeared / became insolvent." Those three triggers are the whole game — DBI does NOT respond to defects while your builder is alive, solvent and simply refusing to fix things (that path runs through BPC dispute resolution instead). Structural defects are covered for 6 years, non-structural for 2, and cover for incomplete work is capped at 20% of the contract price. Advance payments beyond your legal deposit are generally not recoverable.

The new Home Warranty is deliberately broader: it "may apply where eligible domestic building work is incomplete, defective or non-compliant and the builder fails or refuses to complete or fix the work. It is not limited to situations where the builder has died, disappeared or become insolvent" — with total assistance up to $400,000 per home.

The claim, step by step (DBI)

From the BPC's claim page:

1. Find your Certificate of Insurance. Verify it is genuine via the QR code on the certificate or the BPC's policy verification search. 2. Register on the BPC claims portal and lodge there. 3. Upload the record: the certificate, building contract and permits, plus invoices, receipts and proof of every payment made to the builder. 4. List the defects properly: number each item, describe it in detail, and state when you first noticed it. 5. Secure the site if the home is incomplete. If the builder is insolvent, ask the liquidator whether the builder's contract-works insurance is still on foot; if not, arrange your own cover for the half-built structure.

For insolvency specifically, Consumer Affairs Victoria says to submit the claim within 180 days of learning about the insolvency. Diarise it the day you hear the news — liquidations move slowly, but your window does not.

Never got the insurance certificate?

Builders must hand over the insurance documentation before taking a deposit on covered work. If you never received it: ask the builder in writing; failing that, your building surveyor or council may hold a copy against the permit; and the BPC's policy verification search can confirm whether cover exists for your property at all. CAV's advice if cover cannot be confirmed: get legal advice before terminating the contract or engaging another builder — sequencing mistakes here can cost you the claim.

The threshold, honestly

The DBI work-value threshold is stated as $16,000 on Consumer Affairs Victoria pages and the BPC quotes $16,000 for DBI-era policies, while the new Home Warranty threshold is $20,000. If your contract value sits between those figures and the dates are close to the changeover, confirm your position with the BPC directly rather than assuming.

General information about a scheme in transition — not advice on your claim. An insolvency claim with real money at stake is worth an hour of a construction lawyer's time before you lodge, not after it is refused.

This is legal information, not legal advice.