Builder gone bust? Your icare HBCF claim, step by step
When a builder collapses mid-job or refuses to come back and fix their defects, homeowners often discover the builder has no money and no licence left to chase. That's what the Home Building Compensation Fund (HBCF) is for — last-resort insurance on residential building work, administered by icare (Insurance and Care NSW), that can pay to complete the work or rectify defects when the builder can't.
This page explains how an HBCF claim works: whether a certificate of insurance was issued for your job, the trigger events that unlock a claim, the windows to notify and claim, the caps on what you can recover, and what's covered. The numbers below are indicative — the HBCF is governed by the policy wording set under the Home Building Act 1989 and the figures change, so verify everything against your certificate and icare before you rely on it.
Information, not legal advice. Figures current as at 1 July 2025.
What this dispute is
The HBCF (historically called Home Warranty Insurance) is a scheme under the Home Building Act 1989 that protects homeowners on residential building work. A licensed builder doing residential work where the contract price reaches the insurance threshold must take out HBCF cover and give you a certificate of insurance for the job before they start work or take any money — including the deposit.
The threshold at which cover is required has been $20,000 (total contract price including variations) for some time — but thresholds have changed before, so confirm the figure that applied to your contract. If your job was above the threshold and the builder didn't get cover, that's a serious problem for them — but it may also mean there's no policy to claim against, which is its own headache (see the FAQs).
Critically, the HBCF is last-resort insurance. It does not pay simply because you've found defects or the builder is slow. A defined trigger event has to happen first: the builder must have died, disappeared, become insolvent, or had their licence suspended for failing to comply with a money order made in your favour by NCAT or a court. Until one of those occurs, your remedy is against the builder directly — through Fair Trading and NCAT.
icare administers the fund. It assesses your eligibility, the trigger event, and the loss, then pays the cost of completing or rectifying the work up to the policy limits.
Time limits that bite
These deadlines are strict. The Tribunal can extend in some cases, but extensions are not automatic — they're weighed on length, reason, prospects and prejudice.
- 12 monthsNon-completion — insurance period from the date work stopped or failed to startHBCF policy (verify with icare)
- 2 yearsNon-major defects — from completion of the workHBCF policy / HBA s18E
- 6 yearsMajor defects — from completion of the workHBCF policy / HBA s18E
- 6 monthsLodge a Notification of Loss after becoming aware of the loss (and within the insurance period)HBCF policy (verify with icare)
- After a triggerLodge the claim once a trigger event has occurredHBCF policy (verify with icare)
The process, step by step
- 1
Check a certificate of insurance was issued for your job
First, confirm there is a policy to claim against. Find the HBCF certificate of insurance the builder should have given you before starting — it names the builder and licence number, the work, the contract price, and the insurer. No certificate, no straightforward claim.
If you can't find it, ask the builder, check your contract pack, or contact icare to search for a certificate against the builder and your address. The builder must also have been licensed for the work — HBCF doesn't cover work done by an unlicensed person.
- 2
Identify your trigger event
You can only claim once one of four trigger events has happened:
Death — the builder has died. Disappearance — the builder cannot be found after reasonable enquiry. Insolvency — the builder is bankrupt, in liquidation, or under administration. Licence suspension for non-compliance with a money order — the builder's licence has been suspended because they failed to comply with an NCAT or court money order made in your favour.
Finding defects on its own is not a trigger. Gather the proof that fits your situation: a death certificate, evidence of your search for a missing builder, ASIC/AFSA insolvency records, or the licence-suspension notice.
- 3
The money-order route to a trigger (the common path)
The licence-suspension trigger is the one most homeowners have to actively create. If your builder is still solvent and present but simply won't fix the work or pay, you generally have to:
(1) get a money order against the builder at NCAT (or a court); (2) when they don't pay, report the non-compliance so the regulator can suspend their licence for failing to comply with the order; and (3) that suspension then becomes the trigger event that unlocks your HBCF claim. See our guide to enforcing NCAT orders.
This is why HBCF and NCAT are tightly linked: for a solvent but non-compliant builder, the NCAT money order is the engine that produces the trigger.
- 4
Lodge a Notification of Loss in time
Don't wait for the trigger to protect your timing. The policy generally requires you to lodge a Notification of Loss with icare within the relevant insurance period — commonly within 6 months of becoming aware of the loss for defects, and within the 12-month non-completion period for incomplete work. Treat these as indicative and confirm the exact windows with icare.
Provided you notify in time and are diligently pursuing your rights against the builder, you can often still lodge the full claim later — after the trigger event occurs — even past the policy expiry date. The notification is what preserves your position.
- 5
Lodge the HBCF claim and provide evidence
Once a trigger event has occurred, lodge the claim with icare using the HBCF claim form. Provide the certificate of insurance, the contract and variations, proof of payments, your defect or incomplete-work list, photos, any expert/building consultant report, and the evidence of your trigger event (insolvency records, suspension notice, etc.).
icare assesses eligibility and the loss. For defects it generally pays the cost of rectification; for non-completion it pays the reasonable cost to complete, subject to the caps below.
- 6
Assessment, payment and disputes
icare may inspect, appoint a loss adjuster, and ask for further information. If it accepts the claim it pays the cost of completion or rectification up to the policy limits. If you disagree with an eligibility or quantum decision, you can ask for an internal review, and HBCF eligibility/claim decisions can in some circumstances be challenged further — get advice on the current review pathway, as it has changed over time.
Evidence that actually works
Cases are lost on missing documents more than on weak arguments. Get these in order before you file.
The HBCF certificate of insurance for your job
The single most important document — it proves there's a policy. Names the builder, licence number, the work and the contract price.
The building contract and every signed variation
Establishes the contract price (which drives the non-completion cap) and the scope of work.
Proof of all payments to the builder
Invoices, receipts, progress claims and bank statements — needed to work out your loss on a non-completion claim.
Evidence of the trigger event
Death certificate; records of your search for a missing builder; ASIC/AFSA insolvency records; or the licence-suspension notice.
Your NCAT money order (where relevant)
For the suspension trigger, the unpaid NCAT/court money order and proof of non-payment underpin the whole claim.
A defect list or scope of incomplete work
Itemised, located and costed. A Scott Schedule format helps — see the Scott Schedule guide.
Independent expert / building consultant report
Supports the rectification scope and cost. Strengthens both an NCAT case and an HBCF claim.
Dated photos and video
Wide and close, with scale references, showing the defects or the state of incomplete work.
Common reasons people lose
No certificate of insurance was ever issued
If the builder didn't take out HBCF cover (or the job was under the threshold), there may be no policy to claim against. That's a breach by the builder, but it doesn't create a fund claim — your remedy is against the builder.
Claiming before a trigger event
Defects or delay alone don't unlock the fund. icare needs the builder to have died, disappeared, become insolvent, or been suspended for not complying with a money order.
Missing the notification window
Failing to lodge a Notification of Loss within the insurance period (commonly 6 months for defects, 12 months for non-completion) can sink an otherwise good claim. Notify early and verify the window with icare.
Not diligently pursuing the builder
The fund expects you to have chased your statutory warranty rights against the builder — through Fair Trading and NCAT — up to the trigger event. Sitting on your hands can be held against you.
Unlicensed or out-of-scope work
HBCF doesn't cover work done by an unlicensed person, owner-builder work, or work outside the residential building scope. Check your certificate.
Assuming the fund covers everything
Caps apply (non-completion is limited as a proportion of the contract price; total cover is capped per dwelling) and some heads of loss are excluded. Confirm scope and caps with icare.
Orders NCAT can make
This is the kind of order you can ask for — not a guarantee you'll get it. Frame your application around the order you actually want.
Payment for non-completion
The reasonable cost to complete the work — commonly limited to a proportion of the contract price (often cited as up to 20%). Verify the current sub-limit with icare.
Payment for major defects
The cost to rectify major defects, claimable within the major-defect window (commonly up to 6 years from completion). Subject to the per-dwelling cap.
Payment for non-major defects
The cost to rectify non-major defects, claimable within the shorter window (commonly up to 2 years from completion). Subject to the per-dwelling cap.
Associated and consequential costs (limited)
The policy can cover certain associated costs — but the heads and limits are defined by the policy wording. Don't assume; check.
Internal review of an icare decision
If you disagree with an eligibility or quantum decision, you can ask icare to review it, and decisions may be challengeable further depending on the current pathway.
Free help
- icare HBCF — what it is for homeowners
The fund explained, eligibility and how it protects you.
- icare HBCF — Am I ready to make a claim?
The trigger events and what you need before claiming.
- icare HBCF — How do I make a claim?
The claim form, notification of loss, and the process.
- NCAT — Home Building case type
Where you get the money order that can create the trigger.
- Home Building Act 1989 (NSW)
The legislation underpinning the scheme.
- LawAccess NSW — 1300 888 529
Free legal info line, Mon-Fri 9am-5pm.
Questions self-reps ask
What triggers an HBCF claim?
One of four events must occur before you can claim:
the builder has died; disappeared (can't be found after reasonable enquiry); become insolvent (bankrupt, in liquidation or administration); or had their licence suspended for failing to comply with a money order made in your favour by NCAT or a court.
Finding defects or an unfinished job is not, on its own, a trigger.
My builder won't pay but isn't insolvent. How do I get a trigger?
Use the money-order route. Get a money order against the builder at NCAT (or a court). When they don't pay, report the non-compliance so the regulator can suspend their licence for failing to comply with the order.
That suspension is itself a trigger event for an HBCF claim. It's the common path for a solvent but uncooperative builder — see our guide to enforcing NCAT orders.
How much can I get back?
There's a per-dwelling cap on total cover — long set at a minimum of $340,000, though your certificate may show more. Within that, non-completion is typically limited to a proportion of the contract price (often cited as up to 20%), and defect rectification is covered up to the cap.
These figures change and are defined by the policy wording. Confirm the caps on your certificate with icare before you rely on them.
How long do I have to claim?
The windows differ by loss type:
Non-completion — commonly a 12-month insurance period from when work stopped or failed to start. Defects — tracking the warranty periods, commonly 2 years (non-major) and 6 years (major) from completion.
You generally must also lodge a Notification of Loss within the insurance period (commonly within 6 months of becoming aware). Verify all windows with icare — they're policy-defined and change.
What does the fund actually cover?
Broadly, the reasonable cost to complete incomplete work and to rectify defective work that breaches the statutory warranties, up to the policy limits, plus certain associated costs.
It's indemnity for the cost of putting the work right — capped, with exclusions defined by the policy. Owner-builder work and work by an unlicensed person are generally not covered.
There was no insurance certificate. Now what?
If the builder didn't take out HBCF cover when they should have, there may be no policy to claim against — one of the worst positions to be in. The builder has committed an offence and you can still pursue them directly through NCAT, but that's cold comfort if they're insolvent.
Get legal advice quickly. There are sometimes limited avenues, and the position is very fact-specific — call LawAccess NSW on 1300 888 529 to start.
Do I need to win at NCAT before I claim on HBCF?
Not always. If the builder has died, disappeared or become insolvent, that trigger exists independently of any NCAT order — you can claim once you have the proof.
But if the builder is solvent and present, the practical route to a trigger is usually an NCAT money order they then fail to pay, leading to licence suspension. Either way, icare expects to see that you've diligently pursued your rights against the builder.
Related guides
- NCAT home building disputesFighting defects and incomplete work at NCAT — where you get the money order that can create an HBCF trigger.
- Enforcing NCAT ordersWhen the builder won't pay — the non-compliance that leads to licence suspension.
- Fair Trading before NCATThe free first step for a solvent builder, before the fund is ever in play.
- Scott Schedule for building defectsItemise and cost your defects — useful for both NCAT and an HBCF claim.
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NCAT Tracker is not a law firm. This page is information, not legal advice. Figures, fees and statutory periods cited here are current as at 1 July 2025 and are CPI-indexed or amended from time to time — verify on ncat.nsw.gov.au and legislation.nsw.gov.au before you lodge.