A frame goes over in a spring storm. The premium has been paid, the certificate is in the file, and most builders assume something answers. In most of the country the statutory scheme will not, and the document that decides who wears the loss is the one signed before the slab went down.

The Bureau of Meteorology describes October to April as the period when Australia faces a higher risk of severe weather. Its guidance on thunderstorms puts the peak season for severe thunderstorms earlier again, from around September through to March or April. The tropical cyclone season runs from 1 November to 30 April.

On the earlier of those two markers, the window is already opening.

Last season gives the scale. The Insurance Council of Australia put insured losses from extreme weather in 2025 at $4.8 billion across 294,000 claims, up 727 per cent on the previous year, with more than $4.1 billion of that coming from Queensland alone. The costliest single event was not the remains of Tropical Cyclone Alfred. It was a severe storm and hail event across Queensland and New South Wales in November, which reached almost 93,000 claims totalling $1.78 billion. Average cost per claim rose 39 per cent to $16,471.

Those numbers describe finished homes. The harder question for a builder is what happens to the one that is not finished yet.

Three layers, and only one of them answers

Damage to a partly built home sits inside three separate systems, and they are routinely confused with each other.

• The statutory home warranty or indemnity scheme, which the builder pays a premium into and which is issued in the owner’s name.
• Contract works insurance, sometimes sold as construction works or construction all risks, which covers the works themselves while they are being built.
• The building contract, which allocates risk, sets the insurance obligation and governs what happens to the program.

Only the second of those is designed to respond to weather. The first is designed to respond to the builder failing. The third decides who carries whatever the second does not, which is why what the building contract says matters more here than most builders expect.

What the warranty schemes actually do

The schemes have narrow and specific triggers. In New South Wales, section 99 of the Home Building Act 1989 requires insurance against loss from non completion because of the insolvency, death or disappearance of the contractor, and against being unable to have a breach of statutory warranty rectified for the same reasons. No weather peril appears anywhere in it.

Western Australia’s home indemnity insurance answers on death, disappearance or insolvency, and also where registration is cancelled on financial grounds. South Australia’s building indemnity insurance answers where the builder has died, disappeared or become insolvent. The ACT and the Northern Territory run on the same logic through residential building insurance or an approved fidelity certificate.

Victoria moved to a first resort model on 1 July 2026. Under the new Home Warranty scheme, an owner no longer has to wait for the builder to die, disappear or become insolvent. Cover reaches work that is incomplete, defective or non compliant where the builder is unable or unwilling to complete or fix it, capped at $400,000 per home. That is a genuine widening. It is still a scheme defined by the state of the work and the conduct of the builder, not by what the weather did.

Queensland names storm, and the conditions are the story

Queensland is the one jurisdiction whose scheme names the peril. Schedule 6 of the Queensland Building and Construction Commission Regulation 2018 defines a “defined event” to include vandalism, forcible removal of built work, and fire, storm or tempest. Section 10 lets a consumer claim the reasonable cost of reinstatement work where built work is damaged or destroyed by one of those events.

Read the conditions and the picture changes.

• The damage must be to built work that is the subject of an allowed completion claim, meaning the commission has already allowed a claim for the cost of completing the work, or disallowed it only because a payment cap was reached.
• The damage must happen during the claim period for that completion claim, which ends on the earliest of six months after the contract ends, the day the owner contracts a new licensed builder, or seven days after the owner is told in writing that the claim was allowed or disallowed.
• The damage must have happened as a consequence of the work being incomplete.
• The claim must be made within 14 days after the damage would have come to the owner’s attention had they been taking reasonable steps to monitor and protect the built work.

A completion claim only becomes available once a fixed price residential contract has ended on the contractor’s default, death or company dissolution, or on bankruptcy or insolvency coupled with licence cancellation.

The practical effect is that while a solvent, licensed builder is still on the job, the Queensland scheme does nothing about a storm. The cover exists for the window after the builder is already gone, when a half finished house is sitting exposed and nobody is looking after it.

The definitions narrow it further. The schedule defines storm so that it does not include heavy or persistent rain by itself, water rising up from the ground including from natural causes, or an increase in sea level including a tsunami or other storm surge. A separate general provision excludes loss caused or contributed to by earthquake, erosion, flood, landslip, tidal wave or change of watercourse. Rain alone, on those terms, is not a storm.

One more provision is worth knowing. Where a loss is covered both by the statutory scheme and by an insurance policy, the owner cannot claim under the scheme to the extent the policy covers it, and that applies whether or not they actually claim on the policy. The scheme sits behind the contract works policy, not alongside it.

What actually responds

Contract works insurance is the layer built for this. The QBCC describes it plainly in its own guidance for home owners: it applies throughout the construction period until handover and covers the site and materials against theft, vandalism, fire and storm. The same guidance says that most contracts require the contractor to hold it.

That phrasing is the point. Across the mainland it is a contract obligation rather than a licensing one. Lenders usually require it and standard contracts almost always require it, but the obligation lives in the contract and in the loan conditions rather than in the framework that lets a builder hold a licence at all. Tasmania, as set out below, is the exception.

The sentence that allocates the shortfall

Building Commission NSW publishes a standard home building contract for work over $20,000, revised July 2025. Because it is a government document rather than an industry form, it is a useful and freely checkable window into what a standard domestic contract asks of a builder.

Clause 22 requires the contractor to effect and maintain, until completion of the work, public liability cover of not less than $5 million, employer’s liability and workers compensation, and property damage insurance in respect of the work. That property damage cover must extend to work in progress, associated temporary work and materials on site, for the full reinstatement and replacement cost plus at least 10 per cent for debris removal, demolition and consultants fees. The owner’s interest must be noted and a cross liability clause included where possible. The listed perils include accident, theft, fire, explosions, lightning, hail, storm and tempest, vandalism and civil commotion.

Then comes the sentence that decides the money. On settlement of any claim for damage to the work, the contractor must diligently proceed to rebuild, replace or repair, and is not entitled to any payment other than the amount of the claim payment received from the insurer.

That allocates the gap. If the policy pays less than the true cost of reinstatement, whether through underinsurance, an excess, a sublimit or a declined component, the builder rebuilds anyway and has no contractual right to go back to the owner for the difference. The shortfall lands on the builder’s cash position at the same moment the program is blown out.

The clause also gives the owner a remedy that builders underestimate. If the contractor fails to provide written evidence that the required insurances are current when asked, the owner may arrange the insurance and deduct the cost from payments due.

Tasmania does it the other way around

Tasmania is the outlier, and it is instructive. It has no compulsory home warranty insurance scheme at all. What it has instead is a licensing requirement.

Tasmanian builders must provide evidence of contract works insurance and of $5 million public liability cover as part of both a new licence application and every renewal. Where other jurisdictions make warranty insurance the compulsory layer, Tasmania makes insuring the works a condition of holding a builder licence.

The Occupational Licensing (Building Services Work) Determination sets the terms a compliant policy must meet. It must indemnify against unforeseen physical loss of or damage to the contract works from any cause not excluded, during the construction period and any maintenance period. The minimum sum insured is the value of the works with allowance for debris removal and professional fees. Those insured include the principal, the head contractor, the licensed building services provider and subcontractors to the extent their subcontract requires it.

The permitted exclusions are the useful part. A compliant policy may exclude the cost of making good faulty design, workmanship and materials, but it cannot exclude the loss or damage that results from them. It may exclude consequential loss of any kind, but it cannot exclude loss of or damage to the works themselves. And it may exclude damages for delay in completing, or for failure to complete, the works.

That last exclusion draws the line cleanly. The policy pays to rebuild the frame. It does not pay for the six weeks.

Time is a separate question from money

Which is why the program clause matters as much as the insurance one.

Under clause 7 of that same Building Commission NSW contract, delay caused by inclement weather, or by conditions resulting from inclement weather, entitles the contractor to a reasonable extension of time. Both parties must take reasonable steps to minimise the delay.

The entitlement comes with a deadline. The contractor must notify the owner in writing of the cause and the estimated length of the delay within 10 business days of the event. If the owner does not respond within a further 10 business days saying the extension sought is unreasonable, the completion date is extended by the period notified.

Two things follow from that. The written notice inside 10 business days is the entitlement, and a site diary entry is not a notice. And owner silence runs in the builder’s favour, which is unusual enough to be worth knowing before the argument that follows rather than during it.

The picture that emerges

Set the schemes side by side and the pattern is consistent.

The schemes were built to answer one question well, and they do. They answer what happens to an owner when a builder goes under, which is the same counterparty risk that runs through most of the consumer protection framework. They were never built to answer what happens when the weather takes the frame off a house that a solvent builder is halfway through.

That question is answered somewhere else entirely. It is answered in a policy schedule, in a sum insured, in an excess, and in a clause that says the builder rebuilds for whatever the insurer pays and nothing more.

All of those are documents rather than events. Which means they can be read in August, when there is time, rather than in November, when there is not.

Frequently asked questions

General Information Disclaimer: This article is general information only and does not constitute legal, financial or insurance advice. It draws on the Queensland Building and Construction Commission Regulation 2018 and QBCC published guidance, the Home Building Act 1989 (NSW), the Building Commission NSW Home building contract for work over $20,000 (revised July 2025), Building and Plumbing Commission (Victoria) published guidance on Home Warranty, Tasmanian Consumer, Building and Occupational Services licensing information and the Occupational Licensing (Building Services Work) Determination, the Insurance Council of Australia news release of 21 April 2026, the Building Act 2004 (ACT), the Building Act 1993 (NT), the Home Building Contracts Act 1991 (WA), and Bureau of Meteorology published material. Insurance policy terms, contract terms and statutory schemes differ between jurisdictions and between individual policies and contracts. Readers should confirm their own position with their broker, insurer or qualified adviser.

Author: TGB Editorial