Fixed-Price or Cost-Plus? What Queensland Home Warranty Claims Require

Queensland home warranty claims follow the contract type: a non-completion claim requires a fixed-price residential contract with a licensed contractor, while a cost-plus contract is covered only for defective-work claims. The Queensland Building and Construction Commission (QBCC) guidance, “What is home warranty insurance”, updated 11 May 2025, says home warranty insurance is compulsory for residential construction work valued at more than $3,300, including materials, labour and GST, and pays up to $200,000 on claims; the QBCC’s homeowner guide, dated 24 January 2025, strongly recommends avoiding cost-plus contracts. figures checked 1 October 2026

What are the key thresholds, limits and periods?

The same QBCC guidance, updated 11 May 2025, sets out the main figures:

Point	QBCC rule
Compulsory-cover threshold	Home warranty insurance is compulsory for residential construction work valued at more than $3,300, including materials, labour and GST.
Maximum stated payment	Home warranty insurance pays up to $200,000 on claims. Claims remain subject to limitations and some exclusions.
Cover duration	Cover lasts for 6 years and 6 months from the earliest of contract entry, premium payment or commencement of work.
Extension for longer work	If the residential work took more than six months to complete, cover can be extended by 6 months from the cover commencement day.

Does the contract type change the claim route?

Yes. For otherwise insurable residential work, the QBCC describes the following routes:

Contract type	Non-completion claim	Defective-work claim
Fixed-price residential contract	A claim may be made if the contractor does not or cannot finish the contracted work. This route requires a licensed contractor.	A claim may be made if the contractor does not fix defects.
Cost-plus residential contract	Not covered for a non-completion claim.	Covered if the contractor does not fix defects. The QBCC says cost-plus contracts are only covered for defective-work claims.

These are potential claim routes, not guaranteed payments. The applicable limitations and exclusions still need to be considered.

Why does the QBCC recommend fixed-price residential contracts?

A non-completion claim depends on establishing what the homeowner agreed to pay to finish the work under the contract. The QBCC says it needs this agreed amount to settle the claim.

A cost-plus contract has no certainty about the final price. The QBCC therefore says it cannot quantify whether the homeowner has suffered a loss. The pricing structure affects both whether a non-completion route exists and how the loss can be assessed.

The QBCC’s guidance says homeowners should use only fixed-price residential contracts, while its homeowner guide strongly recommends avoiding cost-plus contracts. This does not mean cost-plus work has no protection: defective-work claims remain available. What is missing is the non-completion route, and the uncertain final price makes any claimed loss harder to quantify.

What should be checked before work begins?

The Queensland Government administers the scheme through the QBCC. It applies only to residential construction work, not commercial building projects or home and contents insurance.

A practical contract and quote check should cover:

• The pricing structure: Identify whether the residential contract is fixed-price or cost-plus.
• Contractor licensing: If the owner expects to rely on non-completion protection, confirm that the contractor is licensed.
• The agreed completion amount: The QBCC uses the amount agreed under the contract to finish the work when assessing a non-completion claim.
• The premium arrangement: The contractor collects the premium from the homeowner and pays it to the scheme. The premium is included in the contract and paid before work begins.
• Quote comparisons: For an insurable project, each quote should include the home warranty insurance premium so the quotes can be compared accurately.

Contractors must include the cost of obtaining insurance through the scheme or face significant penalties.

How long does cover last?

The scheme page states that cover lasts for 6 years and 6 months from the earliest of contract entry, premium payment or commencement of work. Its extension can include 6 months from the cover commencement day where the residential work took more than six months to complete.

The QBCC homeowner guide, dated 24 January 2025, also distinguishes between claim types: structural-defect cover generally lasts for 6 years and 6 months from the contract date, while non-structural work is typically covered for around 6 months from completion. The guide cautions that specific circumstances may vary.

Claims must be made within timeframes that depend on the type of claim, so the cover period should not be treated as one universal claim deadline. Cover cannot be renewed after it expires.

What else can affect a claim?

• Paying the contractor more than is allowed by law or under the contract can affect the insurance.
• Where a non-completion claim has been accepted, the QBCC identifies fire, storm, vandalism and theft as events to which the relevant claim provision applies.
• After paying a claim, the scheme tries to recover from the contractor the amount paid to finish or fix the work.
• The insurance covers the property and remains if the home is sold. A buyer or the buyer’s legal agent can search for insurance attached to the property.
• The insurance cannot be transferred between contractors.

This is general information, not financial or legal advice. Check the current QBCC regulator page and any applicable policy PDS for the exact scope, claim timeframes, limitations and exclusions before making a decision or lodging a claim.

Sources

• What is home warranty insurance | Queensland Building and Construction Commission
• Home warranty insurance: A guide for homeowners | Queensland Building and Construction Commission

FAQ

Can I make a non-completion claim under a cost-plus contract?

No. The QBCC says a non-completion claim requires a fixed-price residential contract with a licensed contractor. Cost-plus contracts are limited to defective-work claims.

Why does a fixed price matter when the contractor stops work?

The scheme needs to know the amount agreed under the contract to finish the work. A cost-plus contract has no certain final price, so the QBCC says it cannot quantify whether the homeowner has suffered a loss.

Does a cost-plus contract have no home warranty protection?

No. Defective-work claims remain available if the contractor does not fix defects. Non-completion claims are not available under a cost-plus contract.

Who pays the home warranty insurance premium?

The contractor pays the premium to the scheme, collects the amount from the homeowner and includes it in the contract. The premium is paid before work begins.

How long do I have to make a claim?

The timeframe depends on the type of claim; there is no single universal deadline in the QBCC material. Cover cannot be renewed after expiry, so check the current regulator guidance and any applicable PDS promptly.