Home Warranty and financial requirements: What builders need to know

From 1 July 2026, Home Warranty replaces Domestic Building Insurance (DBI) for new eligible domestic building work in Victoria.

Existing DBI policies continue under the DBI scheme, with insurers who have issued policies up to and including 30 June 2026, will be standing by their policies under the original terms of cover, until they expire. They do not transfer to the new terms of Home Warranty cover.

If you are a builder, you need to understand when Home Warranty applies, when you must pay a premium, and what information must be provided for homeowners.

At a glance

From 1 July 2026:

• Home Warranty applies to new eligible domestic building work
• it generally applies to eligible domestic building work valued at more than $20,000
• it generally applies to homes and residential buildings up to 3 storeys
• the maximum cover available is $400,000, subject to limits and exclusions
• builders must pay the applicable premium for eligible projects
• BPC gives homeowners a Notice of Cover once it accepts the premium
• existing DBI cover continues under the DBI scheme.

What is changing for registered domestic builders

From 1 July 2026, new arrangements apply to how domestic building work is insured and how your financial capacity is assessed as a registered domestic builder.

If you are an existing registered domestic builder with an active DBI Letter of Eligibility on 30 June 2026, you will automatically transition to the new Minimum Financial Requirements (MFR). Your current approved limit will become your Maximum Construction Capacity (MCC).

You will not be automatically reassessed on 1 July 2026. BPC may reassess your financial capacity if you apply to increase your Maximum Construction Capacity, breach your registration conditions, provide updated financial information, or BPC starts a review.

There are 2 key changes builders need to understand:

• Home Warranty replaces Domestic Building Insurance for new eligible domestic building work.
• Minimum Financial Requirements replace the DBI eligibility assessment process for domestic builders.

These changes are connected. Home Warranty applies to eligible projects, while Minimum Financial Requirements help determine the total value of domestic building work you can carry out at any one time.

For builders, this means you need to understand:

• when Home Warranty applies
• when and how the premium must be paid
• what information must be provided to the homeowner
• how your Maximum Construction Capacity applies
• what happens if a homeowner makes a claim
• how Home Warranty may interact with BPC’s regulatory powers.

Home Warranty does not remove your responsibility to complete work properly, meet your legal obligations, or fix issues where you are required to do so.