Insurance Policies that protect your new home build

Most people signing a building contract treat insurance certificates like another box to tick.

They assume their builder has everything sorted. After all, they're a registered builder, right? They must have the right insurance.

But here's what I see happen all the time.

A homeowner comes to me halfway through their build. There's water damage from a storm. Or someone's injured on site. Or the builder walks away with the job unfinished.

And when they go to make a claim, they discover the insurance either doesn't exist, has expired, or doesn't cover what they thought it would.

Now they're facing tens of thousands in unexpected costs, all because they didn't check three simple documents before works began.

What you probably tried

You likely did what most people do. You asked your builder if they had insurance. They said yes. Maybe they even mentioned the types. You felt reassured and moved on.

Or maybe you did request the certificates, glanced at them quickly, saw some official looking documents, and assumed everything was fine.

Why that doesn't work

The problem isn't that you asked. It's that you didn't know what to look for or when to ask for it again.

Insurance policies expire. Coverage amounts can be inadequate. And some builders carry policies that don't actually match what your contract requires.

I've seen builders provide a Public Liability policy with only $2m coverage when the contract specifies $5m. I've seen certificates that expired two months before construction started. I've seen homeowners who never received the Domestic Building Insurance certificate at all.

And here's the thing: your contract specifies exactly what insurance your builder must have, with specific coverage amounts and timing requirements. But if you don't know what's in your contract, you can't check if what you're being given actually matches.

What's really happening

Insurance isn't about trust. It's about protection when things go wrong, which they do on almost every build.

Your building contract isn't just a price and a timeline. It's a risk management document. And one of the biggest ways it manages risk is by requiring your builder to hold three specific types of insurance.

Under the Master Builders VIC Home Improvement Contract, there are three policies you must see:

Domestic Building Insurance (DBI)

This covers incomplete or defective building works for projects over $16,000. It protects you for structural defects for six years and non-structural defects for two years after completion. Your builder must provide this policy and certificate before you sign the contract.

Contract Works Insurance (CWI)

This covers loss or damage to the building works during construction, things like storm damage, theft, or vandalism. The coverage should be the contract value plus 15%. You need to see the certificate before any construction begins.

Public Liability Insurance (PI)

This covers personal injuries or death on the construction site. The minimum coverage should be $5m for any one claim. Again, you need the certificate before works start.

What actually creates protection

It's not the builder having insurance. It's you verifying they have the right insurance, with the right coverage amounts, that's current and valid.

Last year I worked with Sarah, who was about to start a renovation. Her builder assured her everything was in order. But when we reviewed the insurance certificates together, we found the Contract Works Insurance only covered 80% of the contract value. We caught it before works began, and the builder updated the policy.

Three months into the build, there was a fire on site. The insurance covered the full cost of rebuilding that section. If we hadn't checked, Sarah would have been $40,000 out of pocket.

What changes when you know your contract

When you understand what your building contract requires, you stop hoping your builder has sorted the insurance. You start checking.

You request all three certificates before works begin. You read them to confirm coverage amounts match your contract. You note the expiry dates. You ask for updated certificates when they lapse.

You're not being difficult. You're protecting yourself exactly the way your contract was designed to protect you.

And when something does go wrong during the build, because something always does, you know exactly what's covered and who to contact. You're not scrambling. You're prepared.

What to do next

Don't sign your building contract until you've had someone who understands building contracts review what insurance protections you actually have in place.

Not just what the contract says you should have. What you'll actually receive, when you'll receive it, and what to check when you do.

Because a quality build doesn't just come from a quality builder. It comes from a quality contract that you actually understand and know how to use.

Know exactly what you're signing before you build.

Protect your dream build with a Building Contract Health Check:

• See exactly where your contract protects you from risk

• Understand what insurance you should receive and when

• Get a clear checklist of what to verify before works begin