1300 556 140 | mail@boutiquelawyers.com.au
When Victorian building insurers refuse DBI claims, homeowners have 28 days to appeal to VCAT. Boutique Lawyers specialises in challenging unfair BPC and VMIA insurance decisions, helping Melbourne homeowners secure the coverage they deserve through expert VCAT representation and appeals.
Your home is your biggest investment, and when construction problems arise, Domestic Building Insurance (DBI) should protect you. But what happens when your insurer refuses your claim? If you’re a Victorian homeowner facing an insurance dispute, understanding your rights and the appeals process is critical to protecting your financial interests.
At Boutique Lawyers, we specialise exclusively in building and construction law, helping Melbourne homeowners navigate complex insurance disputes, VCAT appeals, and warranty claims. With extensive experience representing Victorian homeowners in insurance disputes, we know exactly how to challenge unfair insurer decisions and secure the results you deserve.
Domestic Building Insurance (DBI), also called home warranty insurance or builders’ warranty insurance, is a mandatory insurance required for all residential building projects in Victoria valued at $16,000 or more. This insurance is designed to protect homeowners when their builder cannot complete the work or fix defects due to specific triggering events.
Your DBI policy is triggered when your builder:
The Building and Plumbing Commission (BPC), which now administers DBI in Victoria (previously managed by the Victorian Managed Insurance Authority or VMIA), provides coverage of up to $300,000 for policies issued after July 1, 2014. This includes:
Coverage Type | Duration | Details |
Structural Defects | 6 years | Major defects affecting the building’s structural integrity |
Non-Structural Defects | 2 years | Minor defects such as cosmetic issues or workmanship problems |
Incomplete Work | Varies | Costs to complete unfinished building work (capped at 20% of contract price) |
Additional Expenses | Varies | Temporary accommodation, storage, and other related costs |
All coverage periods start from the date of project completion or contract termination, as detailed by Consumer Affairs Victoria. If you’re unsure whether your issue falls within these coverage periods, our building dispute lawyers can assess your claim eligibility.
Even when you believe you have a valid claim, insurers can—and often do—refuse to pay. Understanding the common reasons for claim denial can help you prepare a stronger case and challenge unfair decisions.
Building insurance claims in Victoria are most commonly refused for these reasons:
When you purchase or renew your insurance policy, you have a legal duty to provide accurate information. If the insurer believes you failed to disclose important details—such as prior claims, property usage, or existing damage—they may refuse your claim. However, the insurer must prove that you failed to take reasonable care and that this disadvantaged them.
Insurance policies contain specific conditions (such as maintaining your property in good condition) and exclusion clauses (such as damage from floods, wear and tear, or faulty construction). Insurers often misapply these exclusions to deny legitimate defect claims. A building defects lawyer in Melbourne can challenge improper exclusions and prove your defects are covered under your policy. The Victorian Ombudsman’s 2025 investigation found that some insurers apply these exclusions unfairly. Under Section 54 of the Insurance Contracts Act, an insurer cannot refuse a claim due to a breach of condition unless their interests were prejudiced.
If your policy was cancelled due to non-payment of premiums or changes in property usage (such as running a business from home without notifying the insurer), your claim may be rejected.
This is a serious allegation where the insurer claims you intentionally deceived them or acted with reckless indifference. If fraud is proven, the insurer can reject your claim and cancel your policy. However, the burden of proof lies with the insurer, and even minor misrepresentations may not justify claim rejection if it would be unfair.
The Victorian Building Authority (VBA), which transitioned to the Building and Plumbing Commission (BPC) as of July 1, 2025, has made cladding rectification and fire safety compliance a priority, and property owners dealing with cladding defects have special legal protections.
For DBI claims specifically, coverage is only activated when one of the triggering events occurs (death, insolvency, disappearance, or failure to comply with a VCAT order). If your builder is still operating and simply refusing to fix defects, you may need to pursue a VCAT claim against the builder first before the insurance coverage applies.
In December 2025, the Victorian Ombudsman released a damning report on the Victorian Managed Insurance Authority’s (VMIA) handling of DBI claims. While VMIA managed most claims reasonably, the investigation found that complex claims often resulted in:
This is particularly relevant for Melbourne homeowners, as the collapse of Porter Davis Homes Group in March 2023—Victoria’s largest builder insolvency—overwhelmed VMIA with claims and exposed serious systemic weaknesses in their claims handling process.
Since July 1, 2025, responsibility for DBI has transferred to the newly established Building and Plumbing Commission (BPC), which has committed to implementing the Ombudsman’s nine recommendations for improving transparency, communication, and fairness.
If your building insurance claim has been refused, you are not powerless. Victorian law provides several avenues for challenging unfair decisions and holding insurers accountable.
First, request a written explanation from the insurer detailing:
This information is critical for building a strong appeal. A building insurance claim lawyer in Melbourne can review these documents and identify weaknesses in the insurer’s position.
Your first formal step is to lodge a complaint with the insurer’s Internal Dispute Resolution department. Insurers must respond to IDR complaints within 30 days. During this process:
If the insurer doesn’t resolve your complaint within 30 days, or if you’re dissatisfied with their response, you can escalate to the Australian Financial Complaints Authority (AFCA). AFCA is a free, independent dispute resolution service that can:
Important: Time limits apply for lodging AFCA complaints, so act quickly. A domestic building insurance lawyer can help you prepare a compelling submission to AFCA.
For Domestic Building Insurance claims managed by the BPC (or previously VMIA), you have the right to appeal a refusal to the Victorian Civil and Administrative Tribunal (VCAT). The VCAT appeals process involves:
While VCAT is generally a “no costs jurisdiction” (meaning each party pays their own legal costs), VCAT may order the insurer to pay your legal costs if your appeal is successful and the insurer’s conduct was unreasonable.
As a final option, you can pursue legal action through the courts. This is typically reserved for high-value claims or cases involving complex legal issues beyond VCAT’s jurisdiction. Court action carries higher risks (including paying the other side’s legal costs if you lose) but can result in larger awards, including compensation for losses not covered by your policy.
At Boutique Lawyers, located at Level 7, 180 Flinders Street, Melbourne, we specialise exclusively in building and construction law. Our experienced construction lawyers in Melbourne handle all aspects of building insurance disputes, VCAT appeals, and warranty claims. When your home warranty insurance dispute threatens your financial security, our Melbourne-based team provides expert legal representation to challenge unfair insurer decisions.
Stage | What We Do | Your Benefit |
Consultation | Review your claim refusal, policy documents, and evidence | Understand your legal position and case strength without financial risk |
Policy Analysis | Identify errors in the insurer’s decision and weaknesses in their legal arguments | Build a strategic roadmap for your appeal |
Evidence Gathering | Commission independent expert reports, building inspections, and engineering assessments | Counter the insurer’s evidence with credible, independent expert testimony |
Negotiation | Engage with the insurer to resolve the dispute pre-litigation | Avoid the time and expense of VCAT proceedings where possible |
VCAT Representation | Prepare and file applications, present evidence, and cross-examine witnesses | Maximise your chances of a successful outcome at tribunal |
Enforcement | Ensure the insurer complies with VCAT orders or court judgments | Get the compensation you’re entitled to |
When results matter, you need lawyers who understand Victorian building insurance law inside and out. Here’s what sets us apart:
Call us today at 1300 556 140 or email mail@boutiquelawyers.com.au to discuss your home warranty insurance dispute with an experienced building insurance claim lawyer.
When faced with a refused insurance claim, Victorian homeowners have three options:
Consequences:
Risks:
Benefits:
This is a common misconception about Domestic Building Insurance in Victoria. DBI is a “last resort” insurance that only activates when specific triggering events occur: the builder’s death, insolvency, disappearance, or failure to comply with a VCAT or court order (for policies issued after July 1, 2015).
If your builder is still in business but refusing to fix defects, you first need to:
This process can be complex and time-sensitive. A building insurance claim lawyer can expedite the VCAT process and ensure you meet all requirements to activate your insurance coverage. Boutique Lawyers has successfully represented numerous Melbourne homeowners in defect claims, securing both VCAT orders and subsequent insurance payouts.
Timing is critical in VCAT insurance claim building disputes. You have only 28 days from the date of the insurer’s final decision to lodge an application for review at VCAT.
Missing this deadline can be fatal to your case. The 28-day period starts from when you receive the insurer’s written decision after the internal review process. However, the Victorian Ombudsman’s 2025 recommendations suggest that this timeline should only start after the internal review is completed, not when the initial refusal is issued.
Before the VCAT application deadline, you need to:
This is why it’s crucial to contact a VMIA insurance dispute lawyer or BPC insurance specialist immediately after receiving a claim refusal. At Boutique Lawyers in Melbourne, we can help fast-track this process and ensure your application is filed on time and presented clearly and effectively. Our firm’s location at Level 7, 180 Flinders Street, Melbourne, means we’re ideally positioned to attend VCAT hearings and represent Melbourne-based homeowners efficiently.
This is one of the most contentious issues in Victorian domestic building insurance disputes, and it was specifically highlighted in the Victorian Ombudsman’s December 2025 report. The report found that VMIA’s definitions of “defects” versus “incomplete works” were unclear and sometimes applied inconsistently, causing significant distress to homeowners.
Here’s why the distinction matters:
Type of Work | Coverage Limit | Typical Issues |
Incomplete Work | Capped at 20% of the original contract price | Work not yet started or partially completed when the builder became insolvent |
Defective Work | Full policy limit ($300,000) minus incomplete work claims | Work completed but not to standard, requiring rectification or demolition and rebuild |
The insurer’s characterisation of your claim can dramatically affect your payout. For example, if you had a $300,000 contract and the builder completed most of the work but did it defectively, the insurer might try to classify large portions as “incomplete” (capping coverage at $60,000) rather than “defective” (allowing the full $300,000 for demolition and rectification).
The Ombudsman recommended that the BPC provide a plain-language definition distinguishing defects from incomplete works in DBI policies and claims guidance. Until these reforms are fully implemented, homeowners need expert legal representation to challenge improper characterisations.
At Boutique Lawyers, we have extensive experience arguing these technical distinctions at VCAT. We commission independent building expert reports that clearly demonstrate whether work is incomplete or defective, and we present compelling legal arguments to maximise your insurance payout. Our Melbourne team has helped clients secure significantly improved insurance outcomes by properly characterising claims as defective work rather than incomplete work.
If your home warranty insurance dispute involves this issue, contact us immediately at 1300 556 140.
If your building insurance claim has been refused or unfairly reduced, time is not on your side. With strict VCAT deadlines and complex legal requirements, delays can significantly affect the value of your claim.
Boutique Lawyers specialises exclusively in building and construction law, and we have the expertise to handle cases like yours. Whether you’re facing a VMIA insurance dispute, challenging a BPC claim refusal, or need representation for a VCAT insurance claim building hearing, our experienced team is ready to fight for your rights.
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When results matter, choose experienced building and construction law specialists. Choose Boutique Lawyers.
Level 7, 180 Flinders Street,
Melbourne VIC 3000
Phone: 1300 556 140
