Homeowners, did you know that your QBCC Home Warranty Insurance premium is calculated based on your contract value? The higher the contract price, the higher the premium you pay.

However, regardless of whether your building contract is valued at $300,000, $800,000, or over $1 million, the maximum amount generally available under the QBCC Home Warranty Insurance Scheme is $200,000.

This raises an important question:

What does $200,000 buy in today's building industry?

For many homeowners facing major defective work, incomplete construction, or builder insolvency, rectification and completion costs can significantly exceed $200,000.

Where the actual cost to rectify defects or complete the home exceeds the insurance cap, homeowners may be left responsible for funding the shortfall themselves.

Many consumers purchase a home building contract believing they are protected if things go wrong. However, the reality is that the level of cover available may fall well short of the actual costs required to rectify serious building failures on modern residential projects.

Before signing a building contract, homeowners should carefully consider:

• The total value of their project and the type of contract - Fixed Price or Cost Plus
• The maximum insurance cover available. Whether the insurance cap would realistically cover the cost of completing or rectifying the works if the builder fails.
• Consumer protection should reflect the realities of today's construction costs, not the costs of decades ago.