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How to verify a builder's Home Building Compensation insurance in NSW

Short answer

For residential building work over $20,000, a NSW builder must give you a certificate of Home Building Compensation (HBC) insurance before taking any deposit or starting work. Ask for the certificate for your specific job — not a generic eligibility letter — and confirm it names your address, the builder, and the work. If a builder asks for a deposit without it, stop.

Home Building Compensation (HBC) cover — often called “home warranty insurance” — is the safety net if your builder can’t finish or fix the work. The mistake homeowners make is accepting a vague letter instead of the actual certificate.

When it is required

HBC insurance is required for residential building work over $20,000 (contract price including GST). The builder must hold eligibility and issue a certificate of insurance for your specific job before taking a deposit or starting.

What it covers — and its limits

It is a last-resort cover. If the builder dies, disappears, becomes insolvent, or has their licence suspended for failing to comply with a money order, HBC can pay toward completing the work or fixing major defects, within a capped amount and defined time periods. It is not a general warranty and it does not replace checking the builder first — it is what you fall back on when the checks turn out to have missed something.

How to verify it

  1. Ask for the certificate for your job, not a generic eligibility letter. Eligibility means the builder can get cover; a certificate means cover exists for your contract.
  2. Check it names your address, the builder, and the contract value. A mismatch — or a certificate for a different job — is worthless to you.
  3. Confirm it before any money changes hands. The certificate must precede the deposit.

Why insurance is the floor, not the check

An HBC certificate tells you a builder was eligible for cover at a point in time. It says nothing about their disciplinary history, whether their licence is still current, or whether the company is sliding toward insolvency — and eligibility itself can lapse when an insurer reassesses a builder’s finances. In BuilderVet’s data, 1,871 licences that appear in the register are not in a current state, and 482 licence holders carry disciplinary history — none of which a certificate reveals. Verify the builder, then treat the certificate as your fallback. Start at the builder directory.

Related questions

When is HBC insurance required in NSW?
For residential building work where the contract price is more than $20,000 (including GST). Below that threshold a certificate is not required, though the licence and other checks still apply.
What does HBC insurance actually cover?
It is a last-resort cover: if the builder dies, disappears, becomes insolvent, or has their licence suspended for failing to comply with a money order, it can pay toward completing the work or fixing major defects, subject to limits and time periods.
Can a builder take my deposit before giving me the certificate?
No. For work over $20,000 the certificate of insurance must be provided before the builder takes any deposit or other payment, and before work starts. A request for money without it is a serious red flag.

Updated 13 July 2026