Here is a step-by-step guide to making a claim through the Home Building Compensation (HBC) Scheme.
You can only do this if:
- your builder is unable to complete building work or fix defects because they have become insolvent, died, disappeared or had their licence suspended for failing to compensate a homeowner.
- you have valid HBC cover. You can check the validity of your cover using the HBC Check.
1. Notify the provider quickly
It is important to immediately notify the HBC provider that you have suffered the loss. Any delay may impact on your ability to make a successful claim. For more information, refer to section 18BA of the Home Building Act 1989.
You should also try to pursue the contractor to resolve the problem without delay. NSW Fair Trading can help you to resolve the dispute with your builder.
If the HBC cover was issued on or after 1 July 2010, you will be insured by icare and should refer to the icare website for how to notify your loss. The period of cover is six years for major defects and two years for other losses.
If you become aware of the loss within the final six months of the warranty period, you will have six months from the time you become aware of the loss. This could be up to six months after the period of cover (in what’s called the ‘extended claim period’).
In some exceptional circumstances, you may be able to make a ‘delayed claim’ after the warranty period has expired, if the covered event has not occurred during the warranty period.
You will need to demonstrate that you diligently pursued the builder or tradesperson to rectify the problem, and that you properly notified the HBC provider in writing during the warranty period.
If you can’t find the builder or tradesperson, lodge a complaint with NSW Fair Trading. They will conduct their own searches and if unable to find them, they’ll issue you a letter saying the builder or tradesperson can’t be found. Please see Fair Trading’s website for detail on making a builder complaint.
You can use a letter issued by Fair Trading verifying that the builder has disappeared when making a claim to a HBC provider. It can be accepted as evidence that you believe the builder/tradesperson has disappeared and you’ve made all efforts to locate them.
This letter does not oblige an insurer to approve a claim or prevent them making their own enquiries to try to locate the builder. The period in which an insurer is required to determine a claim (ie 45 or 90 days, depending on when the policy was issued) will start when the insurer receives the claim information.
When you notify the HBC provider, you need to tell them about every loss caused by the same defect.
Your provider will need to be notified in writing.