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How to make a home building compensation claim in NSW

By BuilderVet team. Last reviewed 2 November 2026.

You can make a home building compensation claim with icare HBCF only after a trigger event: your builder has died, become insolvent, disappeared, or had their licence suspended for not paying a tribunal or court money order in your favour. If something has gone wrong but none of those has happened, you lodge a loss notification instead, which protects your right to claim later.

This guide covers the trigger events, the time limits, what the cover pays, what to gather and how the claim runs. If your builder has just gone under, read what happens if your NSW builder becomes insolvent first. To confirm a certificate exists for your job, see how to verify home building compensation insurance in NSW.

What is home building compensation cover?

In NSW, home building compensation insurance for most residential building work is provided through the Home Building Compensation Fund, run by icare. You may see it called HBC or HBCF.

icare describes it as last resort cover. It is not like normal home insurance. It is there for when your builder can no longer finish or fix the work and you lose money as a result. icare says it does not cover everyday building disputes, minor problems while your builder is still trading, maintenance, or wear and tear.

When can you make a claim?

icare says you can only make a claim after a trigger event. That is when your builder or tradesperson:

  • has died
  • has become insolvent, for example bankrupt or in liquidation
  • has disappeared and can’t be contacted
  • has had their licence suspended because they didn’t comply with a money order from NCAT or a court in your favour

icare is clear that finding defects or unfinished work on its own is not a trigger event.

If your builder is still trading, icare expects you to take reasonable steps first. That usually means raising the problem with the builder directly, then using Building Commission NSW’s free dispute help, and then applying to NCAT if needed. icare notes that if NCAT orders the builder to pay you and they don’t, their licence may be suspended, and that can become a trigger event.

To check whether a builder or their company is insolvent, see how to check if a builder is bankrupt and how to check a builder’s company on ASIC.

What is a loss notification and why does it matter?

A loss notification tells icare there is a problem before you are able to claim. icare says letting it know is not the same as making a claim. It is a record that an issue exists while you are still dealing with your builder or going through dispute resolution, and it helps protect your right to claim if things change.

You can lodge one through the HBCF online portal, or by emailing or posting the Loss Notification Form.

icare’s claims booklet for homeowners says it may reduce what it pays on a claim notified outside the expected periods. For defective work, that period is within 6 months of you becoming aware of the defect. For incomplete work, it is within 12 months of the contract date or start date, or the date work stopped, whichever is later. So we suggest notifying early rather than waiting to see if the builder recovers.

What are the time limits?

Problem icare’s time limit
Work did not start Notify within 12 months
Work was not completed Notify within 12 months
Major defects Within 6 years of completion
Other defects Within 2 years of completion

icare adds that if you find a defect in the last 6 months of the cover period, you may have another 6 months to tell it. If you miss the limits, you may not be able to claim.

icare’s examples of major defects are serious structural problems and serious water leaks that damage the building. Its example of other defects is non-structural problems such as poor finishes.

How much can the cover pay?

icare says the amount is based on your actual financial loss. It looks at what went wrong, how much work was done, how much you have paid, what it will cost to fix or complete, and the policy limits.

  • Maximum per policy: $340,000, or $300,000 for policies issued before 1 February 2012.
  • Incomplete work: icare’s claims booklet says non-completion costs are capped at 20% of the contract price.
  • Whole property: the maximum is the total available for the property, including claims made by earlier owners.

For incomplete work, icare says you may be covered for loss of your deposit and the cost to complete, up to the policy limit.

icare also lists things not covered, including work by unlicensed builders, changes of mind about design or materials, disputes where the builder is still trading and able to fix the problem, costs outside the time limits, and costs above the maximum.

What should you gather before you claim?

You don’t need everything before you start, and icare says missing information may slow a claim but won’t stop you starting one.

  • Your building contract and related documents
  • The certificate of insurance, or a search of the HBCF Certificates Register on Verify NSW
  • Proof of the trigger event, such as insolvency or liquidation records, a licence suspension, or NCAT or court orders
  • Records of what you have paid and when
  • Recent colour photos showing how far the work got
  • Any inspection or defect reports you already have
  • Emails, texts and letters with the builder, and their replies
  • A clear list of each defect or unfinished item and when you first noticed it

How does the claim process work?

  1. Lodge the claim. icare says the easiest way is the HBCF Portal, where you can upload documents and track progress. You can also email or post the HBCF Claim Form, which may take longer.
  2. Eligibility check. icare confirms it received the claim and checks whether you are eligible.
  3. More information. It may ask for more documents.
  4. Inspections. Inspections or expert reports may be arranged. You don’t always need to get a new inspection yourself first.
  5. Written decision. You get a written decision once the assessment is done. icare says how long this takes varies.

On legal costs, icare says some legal or professional costs may be considered if they relate directly to investigating the problem or supporting a claim. It also says that once you lodge a formal claim, it can’t pay for legal costs if you choose to keep a lawyer managing the claim.

Worked example: a builder in liquidation

Say you signed a $400,000 contract for a new home and paid progress payments up to the frame stage. The builder’s company then goes into liquidation and the site stops.

  1. You check ASIC and see the company is under external administration. That is your proof of the trigger event.
  2. You search the HBCF Certificates Register and find the certificate for your address.
  3. You lodge the claim in the HBCF Portal, with the contract, payment records, recent photos and the ASIC record.
  4. For completing the work, the cap is 20% of the contract price, so up to $80,000 here, inside the overall $340,000 policy limit. icare assesses your actual loss, which may be less.

icare’s booklet also says that if a new builder is engaged, the new builder must get home building compensation cover for the new contract before any payment can be made.

How BuilderVet helps

Our free check shows the builder’s NSW licence and company status with the date we checked it. Our HBC-by-address check looks for a certificate issued for a NSW address. It is not proof of cover, so confirm with icare. For NSW builds, Build Watch (A$79 once) sends change notices for 24 months, so you hear early if a licence or company status changes. See pricing.

Frequently asked questions

Can I claim on HBC if my builder won’t fix defects?

Not straight away. Defects on their own are not a trigger event. If the builder is still trading, you use dispute resolution and NCAT first, and lodge a loss notification with icare in the meantime.

What counts as a trigger event?

The builder has died, become insolvent, disappeared, or had their licence suspended for not complying with an NCAT or court money order in your favour.

How long do I have to claim for defects?

icare says 6 years from completion for major defects and 2 years for other defects. A defect found in the last 6 months may give you another 6 months to notify.

What is the maximum HBC payout?

$340,000 per policy, or $300,000 for policies issued before 1 February 2012. That is the total for the property, including claims by earlier owners.

Is there a limit for unfinished work?

Yes. icare’s claims booklet says non-completion costs are capped at 20% of the contract price.

Does HBC cover work by an unlicensed builder?

No. icare lists work done by unlicensed builders as not covered.

Do I need a lawyer to make a claim?

No. You can claim through the HBCF Portal or by form. icare says it can’t pay legal costs once a formal claim is lodged if you keep a lawyer managing it.

Sources

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Last reviewed 2 Nov 2026