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 your insurance risk profile as assessed using actuarial guidelines. It is not a reflection of the quality of your work as a building contractor.

As announced during 2017, reforms to the Home Building Compensation insurance scheme have been implemented to ensure that it regains financial stability so it can continue to protect NSW homeowners now and into the future. Premium rate changes occurred in April and October 2017. As foreshadowed, following a premium filing submission to the State Insurance Regulatory Authority (SIRA) a further premium rate change will come into effect on 2 October 2018 for most construction types with a final tranche proposed for the second half of 2019.

For single dwelling, other and pool construction types, the increases are relatively small. The new duplex etc. (C09) construction type has been split from the multi-dwelling (unit) classes. This breakdown aims to better reflect the underlying risk profile of this construction type. New multi-dwelling (unit) construction, alterations and additions (C02, C03, C08) remain under review to determine the pricing response as a stand-alone group to emerging experience in these segments.

For construction types other than C02, C03 and C08 there are currently no further planned material changes to premiums. However, we predict that premium filings to SIRA will be made if the market circumstances and emerging trends suggest changes to premiums are required to ensure financial stability and regulatory compliance.

The premium calculator tool can assist you to identify the premium for your project.

Premium calculator

Minimum premiums

A minimum premium of $200 applies to all projects. 10% GST and a 9% 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 rates from 2 October 2017 to 1 October 2018

The following premium rates will apply to all Certificates of Insurance issued after 2 October 2017 until 1 October 2018.

 Construction type  Metro  Rural
   Excl. GST and stamp duty (%)  Incl. GST and stamp duty* (%)   Excl. GST and stamp duty (%)   Incl. GST and stamp duty* (%)
CO1 New Single Dwelling Construction  0.66 0.80 0.53 0.64
C02 Multiple Dwelling Alterations/Additions - Structural  0.58 0.69 0.46 0.55
C03 New Multiple Dwelling Construction (3 storeys or less) 1.72  2.06 1.38 1.65
C04 Single Dwelling Alterations/Additions - Structural 0.58 0.69 0.46 0.55
C05 Swimming Pools  0.66 0.79 0.53 0.63
C06 Single Dwelling Renovations - Non Structural  0.34 0.40 0.27 0.32
C07 Other - not included in other construction types due to unusual circumstances 0.34 0.40 0.27 0.32
C08 Multiple Dwellings Renovations - Non Structural 0.34 0.40 0.27 0.32
C09 New Duplex, Dual Occupancy, Triplex and/or Terrace (attached) Construction 1.72 2.06 1.38 1.65

Note: this table is provided as a guide - the pricing calculator may provide a varying value due to rounding issues.

Premium rates from 2 October 2018

 Construction type Metro  Rural

Excl. GST & stamp duty (%) Incl. GST & stamp duty (%) Excl. GST & stamp duty (%) Incl. GST & stamp duty (%)
C01 New Single Dwelling Construction 0.95 1.14 0.76 0.91
C02 Multiple Dwelling Alterations/Additions (Structural) 0.58 0.69 0.46 0.55
C03 New Multiple Dwelling (Unit) Construction (Up to 3 Storeys) 1.72 2.06 1.38 1.65
C04 Single Dwelling Alterations/Additions (Structural) 0.61 0.73 0.49 0.58
C05 Swimming Pools 0.67 0.80 0.54

0.64

C06 Single Dwelling Renovations (Non-Structural) 0.36 0.43 0.29 0.34
C07 Other - not included in other construction types due to unusual circumstances 0.41 0.49 0.33 0.39
C08 Multiple Dwelling Renovations (Non-Structural) 0.34 0.40 0.27 0.32
C09 New Duplex, Dual Occupancy, Triplex and/or Terrace (Attached) Construction 2.50 3.00 2.00 2.40

Note: this table is provided as a guide - the pricing calculator may provide a varying value due to rounding issues.

    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

    The rates in this category cover structural alterations/additions to

    • existing blocks of units, flats, apartments etc. (any number of storeys); and
    • existing duplexes, triplexes, terraces, villas, townhouses etc. (other than where the work is being undertaken exclusively within one dwelling and does not involve common property – in which case category C04 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).
  • 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
    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

    The rates in this category cover work involving non-structural renovations to an existing single dwelling, including work undertaken exclusively to one dwelling within a block of units, flats, or apartments; or to one dwelling forming part of a duplex, dual occupancy, triplex, terrace, townhouse etc. complex that does not involve common property.

    This category may include contracts for the following structural work types, which are priced as non-structural renovations for premium purposes even though a six (6) year period of insurance may apply under the hbcf policy:

    • the erection of prefabricated patios, garages and sheds
    • bathroom and kitchen renovations that may include projects involving window replacement and water-proofing membranes
    • replacement of roof coverings without alteration to roof structure
    • timber decks (including timber slatted balconies) and pergolas
    • landscaping – where retaining walls do not exceed 25% of the contract price
    • driveways and other paving
    • solar panels
    • swimming pool servicing, renovation and minor repair projects

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

  • C07 Other - Specialist single-trade projects or not included in other definitions 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

    The rates in this category cover work involving non-structural renovations to existing blocks of units, flats, apartments etc. (any number of storeys) and existing duplexes, triplexes, terraces, villas, townhouses etc. (other than where the work it being undertaken exclusively within one dwelling and does not involve common property - in which case 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.