When Do I Need Building Insurance?

Homeowners often renovate their properties before selling. But whether you’re renovating for a sale, or just want a new kitchen island, Domestic Building Insurance (‘DBI’) may be required. See our checklist below to find out if this applies to you.  

What is DBI?  

DBI, formerly known as Owner Builders Warranty Insurance, protects homeowners from defective and unfinished works; or events where the builder becomes bankrupt, dies, or disappears.  

It covers up to $300,000 for structural defects for six years and non-structural defects for two years and is required for building works that exceed $16,000. 

What is considered building works?  

Some common examples of building works can include:  

  1. construction, renovation, removal or demolition of a property;  
  1. construction of garages and decks; and  
  1. work associated with the construction or renovation (i.e. landscaping, repainting, fencing, etc.) 

Who needs DBI?  


Builders are required by the Victorian Building Authority (‘VBA’) to have DBI, and must have a DBI Certificate before they start work. Failure to obtain the appropriate insurance will result in the suspension of registration as a licensed builder.  

It is the builder’s responsibility to obtain DBI for the project on behalf of the homeowner.  

Owner Builders  

Owner Builders that carry out work that exceed $16,000 are required to obtain DBI.  

VBA defines Owner-Builder as “someone who takes responsibility for domestic building work carried out on their own land”.  

Who doesn’t need DBI?   

If works don’t exceed $16,000, then DBI will not be required. That said, a Section 137B report is still required when an owner wants to sell their property.  

Additionally, DBI is not required for multi-storey residential buildings with more than three storeys of accommodation.  

How is it relevant to my property sale?

If a Building Permit has been issued within the last seven years, the Vendor must provide a copy of the Building Permit, Certificate of Occupancy, Certificate of Final Inspection and DBI Certificate in the contract.  

Similarly, if owner builder works have been carried out within 6 years and 6 months, it must be disclosed in the contract.  

How can W Legal Group Help?  

In some circumstances, failure to provide DBI if required will render the contract defective, and the purchaser may be able to end the contract before settlement without penalties.  

At W Legal Group, we have a team of experts to ensure you meet your disclosure requirements when selling property.  

Please contact our team at hello@wlegalgroup.com.au or call us on +61 3 9590 618 if you need support with selling your property. 

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