Homeowner information page - builder insolvency

Please treat our people with courtesy and respect

We appreciate the difficult situation faced by people affected by the collapse of Porter Davis.

We’re here to help. That means trying to get you through the claims process as quickly as possible, while making sure you’re protected from further risks and potential problems. That’s our job, and our responsibility to you, as an insurer.

It works best when we’re working together. That includes treating our people with the same respect and courtesy that everyone’s entitled to. There’s no room for abuse, aggression, or inappropriate language or behaviour – whether it’s online, in person, in writing, or on the phone.

Most people do the right thing, and we’re grateful for your understanding as we do all we can to have claims processed as quickly as possible.

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Introduction

Domestic Building Insurance is a last-resort product. If the builder has died, disappeared, become insolvent, or refuses to comply with a court or tribunal order then – and only then – can a homeowner make a DBI claim.

Our priority is to protect the interests of homeowners, while doing everything we can to get them into their homes as quickly as possible.

How does the claims process work?

What is covered?

If your builder dies, disappears or becomes insolvent, the policy covers you for various things throughout the life cycle of your building project, depending on the stage which the works have reached on site:

• If no building work has started on your building site: a refund of your deposit
• If building work has started on your building site:
  • Any increase in the cost of completing your home with another builder, up to a maximum of 20% of the value of your contract
  • The cost of rectifying defective building work completed by the insured builder
•  If building work has been completed on your site and an occupancy permit has been issued: the cost of rectifying defective building work

How to lodge a claim

First, make sure that you can make a claim. You can make a claim if VMIA is the insurer named on your DBI policy, and your building project has incomplete and/or defective works and:

• your builder has died, disappeared, or become insolvent; or
• for policies issued on or after 1 July 2015, your builder has failed to comply with a Tribunal or Court Order in the way described in the policy wording [PDF, 169KB].

To lodge a claim you need your DBI policy number. If this is the first time you’ve submitted a claim, register to set up your access to the portal. 

Lodging your claim

When lodging a claim, ensure you have the following documents ready to upload:

• Building contract
• Specifications (unless your claim is for a deposit only)
• Plans/drawings (unless your claim is for a deposit only)
• Agreed Variations (if applicable)
• A list of all identified defects (if applicable)
• Building Permit (if one has been issued)
• Occupancy Permit (if one has been issued)
• A current photo of the site (if work didn’t start, or started but didn’t move past the slab stage)
• Invoices & receipts from the builder

Ensure your claim includes all the items you want to claim, especially all identified defects. Adding items after you’ve submitted the claim will delay the progress of your claim.

Once you’ve lodged your claim, VMIA will email you within five (5) business days to confirm we’ve received all required information, or to let you know if any information is missing.

If VMIA asks you for more information, and you don’t provide this information despite follow-up attempts, we reserve the right to reject the claim on the basis that you haven't demonstrated a loss.

If an inspection is required

VMIA will send an inspector to your site to assess all items under the claim to determine if they’re all covered by the policy. The inspector will make a record of the condition the works were left in by the original builder. This is important because any future work will be covered by a new DBI policy, so VMIA needs a record of which work was done by each builder.

VMIA has 90 days from the date of lodgement of your claim to issue you with a decision on whether we accept your claim.

It usually takes the inspector 10 to 14 days to compile a report and send to VMIA, but it can take longer and may require follow-up inspections if the claim is particularly complex (for example, if it relies on specific expert advice) or has a high number of defects.

VMIA then usually takes 14 to 21 days to review the inspection report, building plans, permits and other documentation, and issue a liability decision.

If your claim is for a deposit refund, an inspection is usually not required.

What happens after I lodge a claim?

After lodgement, your claim goes through the following stages:

Liability Decision

After we’ve completed our initial assessment of your claim (which includes reviewing the evidence you’ve provided, the inspection report and the terms of the policy) we will issue you with a liability decision. We either accept or reject liability for each item you’ve claimed. The liability decision will be accompanied by a Schedule of Works.

Schedule of Works

The Schedule of Works sets out VMIA’s decision on every item you have claimed. Essentially, it exists to tell builders what they need to quote on. The Schedule of Works will list all individual defects we have accepted liability for. It will not provide a breakdown of works required to complete an incomplete home because the new builder will have access to the plans and specifications for your home and is required to finish your home to those plans and specifications.

Quantum Decision

Once a liability decision has been issued, VMIA works as quickly as possible to get you a quantum decision. A quantum decision is the amount that VMIA will pay to a new builder to complete your build.

All quotes must match the Schedule of Works issued. If your builder’s quotes don’t match the Schedule of Works, we will ask you to get a new quote.

The time it will take for a builder to provide a quote depends on how many quotes the builder is assessing and the unique circumstances of your build.

In most cases the quantum decision doesn’t require a second inspection of the property. There are only a small number of cases where a second inspection is needed.

VMIA then assess the quotes, calculates the quantum and sends you a quantum decision letter. The quantum decision:

• Explains how the dollar value of your claim entitlement has been valued and • Contains details of the most competitive quote which meets the scope of works.

If you agree with the nominated claim amount, you’ll need to sign a release and authority document. This means you accept our quantum decision and gives us authority to pay the nominated builder to do the work set out in the Schedule of Works. You will then sign a new domestic building contract with the new builder for them to do the work set out in the Schedule of Works.

Unlike the liability decision, which is made within a 90-day timeframe, there is no one-size-fits-all timeframe for a quantum decision. Many parties input into the quantum assessment process, including VMIA, builders who have submitted quotes, and the customer.

How long it takes depends on how long it takes to get a quote, the capacity of builders to take on work at large volumes, VMIA’s own assessment, the complexity of the Schedule of Works, and the accuracy of the customer’s own builder quotes.

Further information

FAQs

More detailed information including Frequency Asked Questions

Online help centre

Our Domestic Building Insurance portal has an online help centre with general information about DBI insurance and the claims process.

Facebook Group

You're welcome to visit our Facebook Group VMIA Official Domestic Building Insurance Claims Information to find more useful information to support you as you lodge your claim.

Support payments for customers without Domestic Building Insurance

The Liquidated Builders Customer Support Payment Scheme has reopened to help Victorians whose builder entered liquidation between 1 July 2022 and 28 February 2024 without taking out insurance on their behalf – as required by law. For more information on how to access the scheme please visit https://www.vic.gov.au/liquidated-builders-customer-support-scheme