First-resort scheme (home warranty)
A first-resort home warranty scheme lets owners claim for defective or incomplete work without first proving builder insolvency, unlike the last-resort model.
Ask Chalkline about this →A first-resort scheme is a home-warranty insurance model that lets a homeowner claim against the insurer for loss from incomplete, defective or non-compliant building work without first having to show the builder has died, disappeared or become insolvent. The owner can go to the scheme directly.
That is the opposite of the last-resort model, which has been the norm in New South Wales and Victoria. Under last resort, the cover is a backstop: an owner can only claim once the builder is dead, has disappeared, or is insolvent (and, in some cases, has had their licence cancelled). If the builder is still trading, the owner has to pursue the builder, not the insurer.
The two models in practice:
- Last resort: NSW Home Building Compensation Fund (HBCF), and Victoria’s Domestic Building Insurance (DBI) as it currently stands.
- First resort: Queensland’s QBCC home warranty scheme has long worked this way, and Victoria is moving to it. Victoria is replacing DBI with a statutory First Resort Home Warranty Scheme for residential developments of three storeys or less, on contracts of $20,000 or more, commencing on or before 1 July 2026 and administered by the new Building and Plumbing Commission. Cover attaches automatically when an owner enters an insurable contract, even if the builder has not paid the premium.
For a builder the shift matters. First resort lowers the bar for owners to claim, so more claims flow through the scheme and the scheme, in turn, leans harder on builder eligibility checks, rectification, and recoveries against the builder. Know which model applies in the state you are building in, because it changes how a defect dispute will actually play out. See DBI (Vic) and HBCF (NSW).
Also known as: First-resort home warranty, first-resort insurance.
Category: Insurance / Home warranty.
Related
See also
References
- Better domestic building insurance, vic.gov.au (verified 2026-06-01)
- QBCC: home warranty scheme (verified 2026-06-01)
Last updated: 2026-06-01. Verified: 2026-06-01. Quarterly review for currency.