What is a Home Building Compensation Fund (HBCF) Insurance?

The Home Building Compensation Fund (HBCF) Insurance is a mandatory insurance product in New South Wales (NSW) that protects homeowners when building or renovating residential properties. It provides a safety net in situations where the builder is unable to complete the work or fix defects due to insolvency, death, disappearance, or license suspension. HBCF insurance is required for all residential building projects valued over $20,000 and must be taken out by the builder before any work begins or deposits are taken.

This insurance covers key risks such as major defects for up to six years and other losses for up to two years after work is completed. Importantly, HBCF only kicks in as a last resort—after the homeowner has attempted to resolve issues directly with the builder. Whether you're building a new home or doing significant renovations, HBCF insurance offers peace of mind and financial protection in case things don’t go to plan. Always check that your builder has provided a valid certificate of insurance before work begins.