TThe QBCC turned down 776 home warranty claims and approved 676 in the year to June. The scheme has never been bigger, and its time limits are tripping up home owners while defect payouts keep climbing.
More home warranty claims were turned down than paid in Queensland last financial year.
The Queensland Building and Construction Commission’s annual report for the year to 30 June 2026 shows 776 claims under the Queensland Home Warranty Scheme were declined and 676 were approved. Another 210 were closed without either outcome, a group the QBCC says includes withdrawn claims, duplicates and claims referred to its resolution services.
It is the second year in a row that declined claims have outnumbered approvals. The year before, 781 were declined and 765 approved.
At the same time, the scheme has never written more cover. The QBCC issued a record 198,944 policies and collected $233.6 million in premium revenue, up from $198.3 million a year earlier.
For builders, the numbers matter beyond the home owner’s experience. The QBCC can recover money it pays on a claim from the contractor who did the work. Every approved claim is a potential debt with a contractor’s name on it.
Why are so many Queensland home warranty claims being declined?
The annual report does not break declined claims down by reason, but it does single one out. The QBCC says declined claims, particularly those where statutory time limits were missed, show how important it is that home owners understand what the scheme covers and when.
Those time limits are tight. According to the notes to the QBCC’s financial statements, structural defects are covered for six and a half years, but a claim must be lodged within three months of the owner noticing the defect. For nonstructural defects, the owner must become aware of the problem within six months of the work being completed, and the claim must be lodged within seven months of completion.
The QBCC describes these terms as set in legislation and not negotiable.
Its plan for the year ahead is to move that knowledge to the front of the job. The regulator says it wants the strict eligibility requirements and timeframes understood before contracts are signed, rather than discovered through the claims process.
The QBCC also reports an approval rate of 44.7 per cent for defect and incomplete work claims, up from 42.7 per cent the year before and 41.4 per cent the year before that. The report does not explain how that rate is calculated.
Where is the home warranty money actually going?
The total value of approved claims fell to $55.7 million, from $60.7 million the year before and $88.7 million two years earlier.
That fall comes almost entirely from incomplete work claims, the part of the scheme that responds when a builder does not finish a job. Approved claims in that category dropped to $24.8 million, from $31.4 million a year earlier and $62.9 million two years earlier. The report does not say why, and the number of incomplete work claims received actually rose, from 605 to 664.
Defects tell a different story. Approved defect claims reached $27.0 million, the highest figure in the report’s five year table, and the number has risen every year from $16.9 million in the year to June 2022. For the first time since that year, the scheme paid out more for defects than for incomplete work.
The QBCC’s notes explain why defect figures move slowly. It describes the scheme as long tail insurance, with defect claims approved up to the ninth development year. In practice, today’s defect payouts can reflect work done years ago, and work being finished now can feed claims for years to come.
Why did home warranty premiums jump?
Renovations drove most of the growth. Policies for alterations and additions rose about 26 per cent, from 130,278 to 163,904. New home policies rose 3.8 per cent to 35,040.
The QBCC says renovation work reached record levels during the year, and that higher contract values and more insurable work pushed premium revenue past its revised forecast. It fits a broader shift we have tracked, with Australia repairing almost as many homes as it is building.
Premiums are reviewed every year on the advice of the scheme actuary and need ministerial approval. The QBCC says it runs the scheme on a sustainable basis without seeking a profit.
The organisation as a whole recorded a surplus of $98.94 million. That figure covers all of the QBCC’s operations and investment returns, not the warranty scheme alone, and the report lists higher outward reinsurance costs and a higher claims expense among the reasons total spending rose 33.1 per cent.
What does a home warranty claim mean for the builder?
Queensland runs what the QBCC calls a first resort scheme. Home owners can claim when a contractor fails to complete work or fails to fix defective work, not only when the builder has gone broke, died or disappeared.
That cover comes with a recovery right. QBCC claims guidance says the regulator may recover any payment made on a claim as a debt from the contractor who carried out, or was to carry out, the work. Where the contractor is a company, it may also pursue people who were directors at the relevant times.
Every approved claim is a potential debt with a contractor’s name on it.
Cover also does not depend on the premium being paid. The QBCC’s notes state that any residential contract entered into by an appropriately licensed contractor is deemed covered by the scheme, whether or not the premium was paid. Insurance related noncompliance accounted for 258 identified offences during the year, or 13.7 per cent of investigations that ended in a warning, an infringement or a prosecution. That was down from 276 the year before, and the QBCC points to improved insurance related compliance.
The report also shows defective work and contract breaches remained the most common reasons the QBCC issued demerit points to licensees, which keeps licensing and compliance tied closely to workmanship.
First resort versus last resort home warranty cover
First resort cover lets a home owner claim when a builder fails to finish the work or fix defects, even if the builder is still trading. Last resort cover only responds when the builder cannot be pursued, usually because they are insolvent, have died or have disappeared. Queensland’s scheme is first resort. Victoria moved to first resort cover for contracts signed from 1 July 2026. New South Wales remains last resort.
How does Queensland’s home warranty scheme compare with other states?
The gap between states is narrowing. Victoria’s new home warranty scheme, run by the Building and Plumbing Commission, started on 1 July 2026. It covers eligible contracts over $20,000 for buildings of up to three storeys, and lets home owners claim when a problem is first identified. Policies issued before that date stay with the original insurer. We covered the broader changes in what the new Building and Plumbing Commission means for builders.
New South Wales still runs last resort cover. A home owner there can only claim if the builder has become insolvent, died, disappeared, or had their licence suspended for failing to comply with a court or tribunal order to compensate the owner.
For Victorian builders, Queensland’s figures offer an early look at how first resort cover behaves at scale, including how many claims are declined.
GOOD BUILDER TAKE
The headline number is the declined claims, but the trend that matters for builders is defects. Payouts for incomplete work have fallen sharply. Defect payouts have risen in every year of the QBCC’s five year table and are now the largest single category of approved claim value. Because the QBCC can recover claim payments from the contractor, those figures are not just consumer statistics. They are a measure of liability flowing back to the trade. The completion date starts the clock on nonstructural defect claims, which makes it one of the most consequential dates on any residential job.
Frequently asked questions
According to the QBCC, structural defects are covered for six and a half years and a claim must be lodged within three months of noticing the defect. For nonstructural defects, the owner must become aware of the defect within six months of completion and lodge the claim within seven months of completion.
Yes. QBCC claims guidance says it may recover any payment made on a home warranty claim as a debt from the contractor who carried out, or was to carry out, the work, and from company directors at the relevant times.
The QBCC approved 676 claims and declined 776 in the year to 30 June 2026, with a further 210 closed without either outcome. Approved claims were worth $55.7 million.
Effectively, yes, for eligible contracts signed on or after 1 July 2026. The Victorian Government says the new scheme, run by the Building and Plumbing Commission, lets home owners claim when a problem is first identified.
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Last updated October 2026, based on the QBCC Annual Report 2025 to 2026.
General information only. This article is general information only and does not take into account any individual circumstances. It is not legal, financial or insurance advice. Figures are drawn from the sources linked and were current at the date of publication. Professional advice should be sought before acting on any of it.
Author: TGB Editorial
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