HBCF premium guidelines

We use risk-based pricing, meaning builders will pay a premium based on their insurance risk profile.

HBCF insurance premiums for your project are calculated using:
  • 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 calculator

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%
Note: Rates in the table above are for metro areas. A 20% discount applies for rural areas.

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%
Note: Rates in the table above are for rural areas. A 20% discount applies.

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.

    Premium guidelines

  • C01 New Single Dwelling Construction
    The rates in this category cover new construction of a house, including the addition of a granny flat or secondary dwelling to an existing dwelling.
  • C02 Multiple Dwellings Alterations / Additions - Structural
    Multiple dwelling alterations/additions (i.e. majority of work is structural) where a strata, company or community title exists over any number of storeys and including terraces, villas, townhouses or a building containing multiple dwelling units irrespective of title (including waterproofing).
  • C03 New Multiple Dwellings Construction

    The rates in this category cover construction projects involving new multiple dwellings (three storeys or less), for example blocks of units, flats etc.

    A policy is issued for the project with an individual certificate of insurance issued for each dwelling.

    This category doesn’t include the construction of free-standing dwellings on individual sites without any shared services or structural components (for example, common walls or roofing) other than developments that are intended to be subject to strata and/or community title on occupation.

    Refer to C09 New Duplex, Dual Occupancy, Triplex and/or Terrace (attached) construction not intended to be subject to strata and/or community title on occupation.

  • C04 Single Dwelling Alterations / Additions - Structural

    Single dwelling alterations/additions where most of the work is structural (including any waterproofing).

    The rates in this category cover for work involving structural alterations/additions to an existing single dwelling (including such work undertaken exclusively to one dwelling within a block of units, flats, apartments etc. or to one dwelling forming part of a duplex, dual occupancy, triplex, terrace, townhouse etc. complex which does not involve common property).

  • C05 Swimming Pools
    The rates in this category cover the following types of pool construction/work:
    • New In-ground Concrete
    • New In-ground Fibreglass
    • New In-ground Vinyl Lined
    • New Above Ground
    • New Pool Inside dwelling
    • Alterations/Repair to existing Pool
    • New Spa
  • C06 Single Dwelling Renovations - Non-Structural

    Renovations (where most of the work is minor Non-Structural) to single dwellings including specialist contractors and single trade projects (where majority of work is minor works) and including: 

    • the erection of prefabricated patios, garages and sheds
    • bathroom and kitchen renovations other than projects involving window replacement (but NOT waterproofing)
    • replacement of roof coverings without alteration to roof structure (that is like for like replacement NOT involving any work to the roof framing elements)
    • timber decks (including timber slatted balconies) and pergolas
    • landscaping – where retaining walls do not exceed 25 per cent of the contract price
    • solar panels
    • driveways and other paving.

    The above does not impact on the period of cover provided under the policy.

    The C06 category also covers specialist contractors (for example electricians, plumbers, gasfitters, and air conditioning installers) and single trade projects involving single dwellings.

  • C07 Other - Not included in other construction types due to unusual circumstances

    When a building contractor specifies this construction type in the policy submission or when using the pricing calculator, there will be a prompt to specify if the building is single or multi-dwelling.

  • C08 Multiple Dwelling Renovations - Non-structural 

    Renovations where most of the work is minor non-structural, to where a strata, company or community title exists over any number of storeys and including terraces, villas, townhouses or a building containing multiple dwelling units irrespective of title (unless scope of works include waterproofing and/or roof repairs). If the work being undertaken is exclusively within one dwelling and does not involve common property - category C06 applies.

    A policy is issued for the project with an individual Certificate of Insurance issued for each dwelling where the average is more than $20,000 per dwelling (i.e. contract price divided by number of dwellings).

    The C08 category also covers specialist contractors (e.g. electricians, plumbers, gasfitters, and air conditioning installers) and single trade projects involving multiple dwellings.

  • C09 New Duplex, Dual Occupancy, Triplex and/or Terrace (Attached) Construction

    The rates in this category cover work involving the construction of a new duplex, dual occupancy, triplex &/or terrace/townhouse (attached).

    This category covers the construction of a new single dwelling with a granny flat. A policy is issued for each dwelling.

    Refer to C03 category for developments which are intended to be subject to strata and/or community title on occupation.