Owner Builder Home Indemnity Insurance

Owner Builder Home Indemnity Insurance is required in Western Australia when an Owner Builder sells their dwelling within the Statutory Indemnity period.

The Period of Cover is 7 years from the Building License Issue date.

Owner Builders are unable to sell their property prior to 3 years after the Building License issue date. If the Owner Builder requires to sell before these 3 years have expired, they are able to apply for a letter of exemption from the minister. This is assessed on a case by case basis.

Home Indemnity Insurance covers Residential/Domestic Building Work. Multi Unit developments exceeding 3 story's and fully leased retirement villages are exempt from obtaining Home Indemnity Insurance.

The minimum value of works required to obtain Home Indemnity Insurance is $12,000. The maximum amount that can be claimed under a Home Indemnity Insurance policy is the value of contract work with a limit of $100,000.The purchaser and any subsequent purchaser of the home, not the actual owner builder, can claim on their Indemnity Policy if the owner builder has become insolvent, died or disappeared.

Home Indemnity Insurance only covers defects, which are not identified in the Inspection Report that are identified within the 7 year Statutory Indemnity period. Failure to provide this insurance prior to selling the property can result in fines up to $10,000. If a contract of sale has been entered into without providing the Indemnity Insurance, the purchaser has rights to pull out of the sale prior to completion of the contract.

Our response time to generate your Indemnity Certificate is normally within 120 minutes and of course subject to quality and detail of the Application.

What is it?
It is a compulsory insurance required by the Home Building Contracts Act 1991 (WA).

What does it cover?
The insurance provides the purchaser (and subsequent purchasers) with cover for the Statutory Warranties provided in the Act. It is important to note that a claim can only be made under this policy if the Owner Builder dies, disappears or becomes insolvent. Otherwise, it is the Owner Builders responsibility to rectify any faults that are not listed as defects, incomplete works or second hand materials under the defect report.

Who should have it?
The legislation applies to any residential building work undertaken by an Owner Builder, over $12,000 in value. This insurance only applies where the property is sold within 7 years from the Building License date in Western Australia. It is not required if the Owner Builder does not sell the property within this period.

Period of Insurance?
Home Indemnity Insurance commences from the Building License date and extends for 7 years. The maximum limit of indemnity is $100,000.

What happens if an Owner Builder sells without Owner Builder Indemnity Insurance?
An Owner Builder that sells within 7 years from the Building License date and fails to obtain Owner Builder Indemnity Insurance, or attach an insurance certificate to the Contract of Sale, can face a fine of up to $10,000. If a Contract of Sale has been entered into without Owner Builder Indemnity Insurance, the purchaser can void the contract at any time before completion of the contract.


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For a Indemnity Insurance quote request

For a List of Accredited Inspectors List - click here

For a Indemnity Insurance Product Disclosure Statement & Policy Wording - click here