The WA Government media statement dated 8 April 2025 says eligible homeowners may be entitled to up to $40,000 for a lost deposit and up to $200,000 for incomplete or defective work if their builder dies, disappears or becomes insolvent. These are separate limits for different loss categories; the statement does not present them as a combined payout.
figures checked 1 October 2026
What do the two HII amounts cover?
Home indemnity insurance, or HII, helps eligible homeowners with specified losses if their builder dies, disappears or becomes insolvent.
| Loss category | Maximum stated by the WA Government | Builder circumstance |
|---|---|---|
| Lost deposit | Up to $40,000 | The builder dies, disappears or becomes insolvent |
| Incomplete or defective work | Up to $200,000 | The builder dies, disappears or becomes insolvent |
“Up to” represents a maximum, not an automatic payout. The amount an eligible homeowner may claim depends on the applicable rules and policy terms.
When is HII compulsory in Western Australia?
The WA Government statement sets out two connected requirements:
- HII is compulsory for residential building projects valued at $20,000 or more.
- Under the Home Building Contracts Act 1991, the builder must take out HII in the owner’s name before accepting payment or commencing work.
The project value determines whether the compulsory requirement applies, while the owner’s name and the timing of the policy are separate requirements.
How long does the policy usually cover?
In most cases, the policy must cover:
- the construction period; and
- six years from the practical completion date.
The six-year period is tied to the practical completion date stated in the WA Government material, rather than the date on which the deposit was paid.
Did the reforms have a fixed commencement date?
The statement dated 8 April 2025 said the scheme changes would take effect “as soon as possible”. It did not provide a fixed commencement date, so that announcement alone should not be treated as proof that the changes began on a particular day.
Check the WA Government page for any later implementation update before relying on the announced amounts.
What should I check before relying on these limits?
Before entering a contract or making a claim, check:
- The WA Government page: confirm the current scheme status, effective date and eligibility information.
- Your policy’s PDS: read the definitions, cover, limits and conditions that apply to your project.
- The project details: check the contract value, the legal owner’s name and the practical completion date.
This is general information, not financial or legal advice. Confirm the current position on the regulator page and in the policy’s PDS.
Sources
FAQ
Do the $40,000 and $200,000 limits apply to the same loss?
No. The WA Government statement identifies them as separate amounts: up to $40,000 for a lost deposit and up to $200,000 for incomplete or defective work. It does not state that the amounts form a combined payout.
When do the stated loss amounts apply?
The statement applies them to eligible homeowners if the builder dies, disappears or becomes insolvent. It says homeowners “may be entitled”, so eligibility and the applicable policy terms still matter.
Is HII compulsory for a project valued at $20,000?
The WA Government statement says HII is compulsory for residential building projects valued at $20,000 or more. For those projects, the builder must take out HII in the owner’s name before accepting payment or commencing work.
How long does HII usually cover?
In most cases, the policy must cover the construction period and six years from the practical completion date. Check the WA Government page and the policy’s PDS for the current position and project-specific terms.
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