HBCF premium guidelines
We use risk-based pricing, meaning builders will pay a premium based on their insurance risk profile.
- the type of project
- the total contract value for the project
- your individual loading or discount rate
- the location of the project.
Each builder is allocated an individual loading or discount to the base premium.
The loading, or discount, is based on each builder's insurance risk profile as assessed using actuarial guidelines. It is not a reflection of the quality of the work of the building contractor.
As announced during 2017, reforms to the Home Building Compensation insurance scheme have been implemented to ensure the scheme regains financial stability and can continue to protect NSW homeowners now and into the future.
Premium rate changes last occurred on 1 January 2021. Following a premium filing submission to the State Insurance Regulatory Authority (SIRA), further changes will come into effect on:
- 30 July 2021 for construction types C01, C04, C05, C06, C07 and C09.
- 30 July 2021 for all multi-unit dwelling projects for construction types C02, C03 and C08.
The new rates and premium weighting factors will apply to all policies (certificates of insurance) quoted and issued from the dates above for the respective construction codes.
The risk-based rating structure used to determine builder risk factors is unchanged.
Premium changes from 30 July 2021 for Construction Types C01, C04, C05, C06, C07 and C09
% Change in Base Rate
Construction Type | 30 July 2021 |
---|---|
C01 – New Single Dwelling |
-6% |
C04 – Single Dwelling Alterations |
+9% |
C05 – Swimming Pools |
-9% |
C06 – Renovations | +9% |
C07 – Other - Not included above | +9% |
C09 – Duplexes, Dual Occupancy, Triplexes, Terraces (new Single Dwellings with a Granny Flat) | -6% |
Metro Area Base Rate
Construction type | 30 July 2021 |
|
---|---|---|
Base rate excluding GST and stamp duty | Base rate including GST and stamp duty | |
C01 – New Single Dwelling |
0.837% | 1.003% |
C04 – Single Dwelling Alterations | 0.894% | 1.072% |
C05 – Swimming Pools | 0.469% | 0.563% |
C06 – Renovations | 0.280% | 0.336% |
C07 – Other - Not included above | 0.284% | 0.340% |
C09 – Duplexes, Dual Occupancy, Triplexes, Terraces (new Single Dwellings with a Granny Flat) | 0.837% | 1.003% |
Rural Area Base Rate
Construction type | 30 July 2021 |
|
---|---|---|
Base rate excluding GST and stamp duty | Base rate including GST and stamp duty | |
C01 – New Single Dwelling |
0.669% | 0.802% |
C04 – Single Dwelling Alterations | 0.715% | 0.858% |
C05 – Swimming Pools | 0.375% | 0.450% |
C06 – Renovations | 0.224% | 0.269% |
C07 – Other - Not included above | 0.227% | 0.272% |
C09 – Duplexes, Dual Occupancy, Triplexes, Terraces (new Single Dwellings with a Granny Flat) | 0.669% | 0.802% |
Premium rate change from 30 July 2021 for Multi-Unit Dwelling Construction Types C02, C03, C08
% Change in Base Rate
Construction Type | 30 July 2021 |
---|---|
C02 – Multi Dwelling Alterations | 50% |
C03 – New Multi Dwelling Construction up to 3 Storeys | 17% |
C08 – Multi Dwelling Renovations | 35% |
Metro Area Base Rate
Construction Type | 30 July 2021 |
|
---|---|---|
Base Rate excluding GST and stamp duty | Base Rate including GST and stamp duty | |
C02 – Multi Dwelling Alterations | 6.364% | 7.630% |
C03 – New Multi Dwelling Construction up to 3 Storeys | 5.213% | 6.250% |
C08 – Multi Dwelling Renovations | 1.969% | 2.361% |
Rural Area Base Rate
Construction Type | 30 July 2021 |
|
---|---|---|
Base rate excluding GST and stamp duty | Base rate including GST and stamp duty | |
C02 – Multi Dwelling Alterations | 5.091% | 6.104% |
C03 – New Multi Dwelling Construction up to 3 Storeys | 4.170% | 5.000% |
C08 – Multi Dwelling Renovations | 1.575% | 1.889% |
Minimum premiums
A minimum premium of $200 applies to all projects. 10 per cent GST and a 9 per cent stamp duty are applicable to HBCF premiums. Where the contract price for a residential construction project is not known, the reasonable market cost of the labour and materials involved in the project is used to calculate the applicable premium.How risk-based pricing works
Based on HBCF insurance claims data, some characteristics have greater potential to increase the incidence of insolvency. These characteristics are weighted for each builder to provide the premium loading or discount, which is then applied to the base premium for the type of work being undertaken. For example, incorporated entities (companies) have a significantly greater frequency of claims over sole traders and partnerships. This is reflected in the premium icare charges. Other attributes taken into account as part of the risk-based approach include the period the entity has been licensed, retained (adjusted) net tangible assets and net profit.- C01 New Single Dwelling Construction
- C02 Multiple Dwellings Alterations / Additions - Structural
- C03 New Multiple Dwellings Construction
- C04 Single Dwelling Alterations / Additions - Structural
- C05 Swimming Pools
- C06 Single Dwelling Renovations - Non-Structural
- C07 Other - Not included in other construction types due to unusual circumstances
- C08 Multiple Dwelling Renovations - Non-structural
- C09 New Duplex, Dual Occupancy, Triplex and/or Terrace (Attached) Construction