10 things to consider before buying Owner Builder Insurance

1.       Is the insurer an Australian insurer? Remember not all insurers are the same as unfortunately seen following recent Australian weather events.  Check if the insurer is ASX listed, check their claims processing record and read the Product Disclosure Statement Exclusions- that’s the key. If you are unsure, ask your Broker or contact the insurance underwriting agency Australian Owner Builder Insurance Services ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it or phone 1300 850 131).

2.       Does the Insurer consider commenced works scenarios and builder to lock up situations?

3.       Are your Contractors insured? Don’t rely on Contractors insurance paper, make further enquiries through the insurer and your State building commission or authority. Unregistered trades people and unlicenced builders are not new – double check licence numbers and insurance documentation.

4.       Is the Owner Builder Policy extendable beyond the initial insurance period? Be mindful of non extendable Policies.

5.       What are the ‘excess’ levels when making a claim? Lower excess levels work for Owner Builders.

6.       Does your insurer understand you? Good Owner Builder Insurance policies are built around Owner builders and their unique circumstances, for example:

a.       Construction plant and equipment cover provisions included at no extra cost

b.      Reasonable construction (sum insured levels) escalation provisions to at least 15% because building costs are rising daily

c.       Transit cover for those times Owner Builders transport goods to the building site at no extra cost

d.      We all want value for money insurance. Adding protection that adds to your insurance costs, and which are unlikely to be relevant to the Owner Builder is to be questioned . In other words Policy Wordings that overreach commonplace Owner Builder situations, resulting in adding to premiums and cost, increasing complexity and in most cases with dubious relevance with little scope for the Owner Builder to claim is wasteful. For example, when does an Owner Builder require the following exemplary inclusions when Owner Builders are not trained, authorized or proficient in any of these 'dangerous' tasks? If its in the Policy Wordings, then you are paying for it!  
i.       ‘blasting or explosive cover?
ii.      underground works or tunnel?
iii.     technology protection on a construction site?
 iv.     irrigation or dam works?
   v.    maintenance or product cover?

7.       What happens if there’s an incident outside the construction period? Unforeseen incidents can regretfully occur outside the construction period. After Loss Cost provision provides insurance cover beyond the policy period for incidents that may be related to the building process

8.       Who’s managing your claim? Unforeseen incidents are just that; unforeseen. Responsive Owner Builder Policies are backed by professional and exclusive claims management teams. When your home is on the line, check your insurer will pick up the phone and respond immediately. Professional, Australian based claims management (more than a call centre but an actual claims team) is ready

9.       What about technology? Technology, particularly environmental technology such as solar, heating, water and lighting and security installations, CCTV and interactive homes poses higher risk factors. Check the Policy details to see if you’re covered.

10.   Are you fully protected? Price is important, but nowhere near as important as being protected to fully recover from an unforeseen incident. That’s where insurance experience and Owner Builder detail knowledge is life changing. When it’s your home, family and wealth all on the line – make sure you’re on the right side. Choose an insurer with a track record.

What does Construction Insurance cover?

Owner Builders are ‘typical’ Australian’s who have decided to build or renovate. Insurance cover should recognize the importance of owner building and make reference to particular circumstances that could evolve when a building project goes wrong. The AOBIS Policy wording identifies these peculiarities and makes provision accordingly; see Policy Wording in a snap shot

The Policy does provide for optional cover such as sub-contractors, tools and existing property and contents.
Insurance policy wordings should quickly and clearly explain what Owner Builders can expect in the event of an unforeseen incident. It’s all about ‘what’s covered', not company brochures (just ask recent flood and fire victims).
AOBIS Policy wording includes:
1.  Removal of Debris: site clean up
2.  Professional Fees – get an engineer or inspector to appraise the site
3.  Expediting Expenses. Priority express materials, supplies and equipment to the site
4.  Temporary accommodation for you, your family and your pets
5.  After Loss Lump Sum cover
6.  Up to $20,000 Equipment cover – max $2,000 any one item unless itemized
7.  You may elect as optional extra: Tools cover, Existing Property Structures, Transit, and Mitigation Expenses

Insurance Policies only matter in the event of an incident. Therefore in the circumstances of an incident, 2 key considerations are critical:
1.  What am I covered for? AOBIS policy wording is plain English, tailored for Owner Builders
2.  How do I make a claim NOW? Download a Claims form from the AOBIS web site. We’ll do the rest
Period of Insurance? 
What if I need more time? All policies are 12 months minimum. If however, you require additional time; we can extend on a 3 month basis up to an additional 12 months.
What if I am using sub-contractors?
Sub contractors are required to carry a minimum of $5mil Public Liability on building sites. Before any sub contractor enters a work site they must provide the Owner Builder with a current (check the expiry date) contractors insurance certificate of currency. It is recommended however that Owner Builders take up the option to include sub contractors.
What if I am getting a licenced builder or trades contractor to complete the building to lock up?
Can I still get cover?  Yes, we will cover you for total construction value.
How do I make a claim?
To make a claim please contact us 1300 850 131 or contact your insurance broker. A claims form can be found in the claims section of this website.
What if I have already started construction?
We can provide cover as a commenced works policy.
Is my existing home and structures covered during the renovation phase?
In most instances standard home and contents policies do not cover existing property during renovations works. AOBIS Policy does provide optional Existing Structures and Contents cover.
What is the standard excess?
Standard national excess is $500 excluding NSW which is $1000
Under my construction policy is there cover if I get injured?
You are not covered for personal injury under the construction policy; however we can offer Personal Accident and Sickness cover. Please refer to your insurance intermediary.
Are my Voluntary Workers covered?
You will need to purchase a separate insurance policy for voluntary workers. Please refer to your insurance intermediary.
What if I need to increase my sum insured – mid term?
AOBIS Policy value may be increased midterm – conditions do apply
Am I still insured once construction is complete?
No. Upon securing an occupancy certificate or final inspection certificate the construction insurance ceases.
Are my on site materials covered?
Yes provided they are stored on site and included in the sum insured.
What should my sum insured include?
The total cost of construction including materials and labour at replacement value – remember include building labour at builder rates
Are my tools covered?
You may endorse hand tools
I live onsite, is my family covered?
Family members are not covered for Personal injury whilst they live on the construction site.

What happens if I underinsure?
If you are underinsured then the full value of your claim may not be paid under the average clause. Please refer to page 18 of the PDS

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