Building your dream home or carrying out a renovation or extension can be an exciting but daunting task. As a builder, we are not only responsible for creating a safe and beautiful living space but also for ensuring the financial protection of you, our clients. In Victoria, this protection comes in the form of Domestic Building Insurance (DBI).
What Is Domestic Building Insurance (DBI)?
Domestic Building Insurance, often abbreviated as DBI, is a critical safeguard for homeowners. It is a mandatory insurance policy that provides financial protection in the event of defective or incomplete building work. Builders in Victoria are legally required to take out Domestic Building Insurance for all projects valued at $16,000 or more.
If you’re considering a renovation, extension or new build, clients should ensure their chosen builder is eligible to obtain Domestic Building Insurance from the Victorian Managed Insurance Authority (VMIA). You can do this by searching their database on the VMIA website. https://www.dbi.vmia.vic.gov.au/Builder-search
What Does Domestic Building Insurance Cover?
Domestic Building Insurance covers clients for a number of scenarios including:
- The cost of completing work if a builder is unable to complete the project due to insolvency, death, or disappearance;
- Loss of deposit in the event a builder fails to commence work or becomes insolvent;
- The cost of rectifying incomplete or defective building work performed by a registered builder if they are unable or unwilling to do so themselves.
When Does Domestic Building Insurance Take Effect?
The DBI policy starts on the date of the building contract or building permit, whichever is earlier. Without a DBI policy, a builder cannot enforce a building contract, receive any deposit or commence work until the insurance is in place and you have been given a copy of the Certificate of Currency.
Checking a DBI Policy
In Victoria, Domestic Building Insurance is a critical component of the construction process for projects exceeding $16,000. Clients of any builder in Victoria should always verify the existence of a valid DBI policy related to their building contract before paying a deposit. Here are some tips for checking a DBI policy:
- Make sure you request a copy of the DBI certificate from your builder before paying your deposit. This certificate should clearly outline the coverage period and details of the policy.
- Ensure that the DBI policy is valid and up-to-date by using the policy verification search at https://www.buildvic.vic.gov.au/ClaimsPortal/s/verify-certificate.
- Make sure that the builder’s name on the DBI certificate matches the builder’s details in your contract. This ensures that the correct policy is in place for your project.
Sherbrooke Design and Construction’s DBI Process
At Sherbrooke Design and Construction, we obtain your DBI policy on the same day your contract is signed and before asking you to make any deposit payment to us. Your Certificate of Currency for Domestic Building Insurance is then forwarded to you along with your deposit invoice.
Why Choose Sherbrooke
Each project that Sherbrooke undertakes is different, and therefore the skill set required to take on that type of work is also different. Every project is priced individually and at the time of contract, so we do not end up in the same scenario as volume builders who have sold projects sometimes 18 months before they start the build. This is a big contributing factor as to why so many builders find themselves in trouble today.
Here at Sherbrooke Design and Construction, we specialise in both large-scale extension renovations and inner suburb custom new home builds. We offer a boutique building experience with a personal approach. We also offer friendly, no obligation advice to assist you in your decision making process and we have the ability and flexibility to customise any project.
If a custom new home, extension or renovation is on your to-do list, contact us today and don’t let another year pass you by!
