Insurance & Hidden Costs questions

These are essential but often overlooked expenses that fall outside the standard building contract. They can add tens of thousands to your total spend, especially on complex or sloping sites.

Common hidden costs to watch for

Site works: Includes excavation, retaining walls, soil removal, rock breaking, and levelling. Costs vary widely depending on terrain and soil conditions.

Service connections: Charges to connect water, sewer, electricity, NBN, and stormwater. May involve trenching, permits, or infrastructure upgrades.

Council contributions: Also known as developer levies or infrastructure charges. These are fees paid to the council to support local services and can range from a few thousand to over $20,000 depending on location.

Reports and assessments: Required for planning approval and compliance:

• Geotechnical (soil) reports
• Bushfire Attack Level (BAL) assessments
• Flood studies
• Arborist or heritage reports

Temporary services: Includes site fencing, portable toilets, temporary power, and water supply during construction.

Insurance: You may need:

• Contract works insurance
• Workers compensation, if it applies to your arrangement
• Public liability cover
• Home warranty insurance, where your state requires it for work by a licensed contractor (it generally does not cover an owner builder’s own work)

Landscaping and fencing: Often excluded from builder contracts. Includes turf, plants, retaining walls, boundary fencing, driveways, and paths.

Interest and loan costs: If you’re financing the build, you’ll pay interest during construction, often on progressively drawn amounts. Also factor in loan setup fees and mortgage insurance if applicable.

Moving and setup: Final costs like removalists, cleaning, furniture, blinds, appliances, and internet setup can add up quickly.

Budgeting tip

• Hold a contingency as its own budget line. There is no single right figure, so set it with your quantity surveyor, lender or builder based on how complete your design and quotes are.
• Use platforms like My Build Hub to track these expenses in real time and avoid surprises.

Bottom line: Hidden costs are real, and they’re often the reason builds go over budget. Planning for them early and tracking them closely is the key to staying financially in control.

A geotechnical engineer or accredited testing company takes soil samples and issues a report that gives a site classification. For residential slabs and footings this is usually based on Australian Standard AS 2870. The engineer designs the footings from it and the certifier will normally ask for it, which is why it is treated as required in practice. Whether a report is strictly required for your project is decided by your certifier and your state's rules, so confirm before you skip it. Do it before the structural design is finalised, because the result can change the footing design and cost.

In MyBuildHub: save the report in your project documents, add it as a Task before structural design starts, and note the site classification in your project notes so every consultant works from the same information.

Check yourself: your certifier and your structural engineer.

General information only. It is not legal, financial or professional advice and may not apply to your project. Confirm requirements with your regulator, your certifier or a lawyer before acting.

• Builders and owner-builders are responsible for insuring tools, materials, and equipment against theft or accidental loss.

• Use lockable storage, staged deliveries, and employ night-time site lighting or CCTV for extra protection.

• Most standard insurances exclude theft if security measures are found lacking, so verify prior to purchase.

A sale of a home that has been built or renovated can involve approval, disclosure, warranty and insurance issues, and owner-built work can carry additional obligations. NSW and Queensland require particular warnings in specified circumstances, Western Australia can require home indemnity cover before a sale, and Victoria also has owner-builder sale requirements. The applicable dates and documents differ. Tell your conveyancer about all owner-built work, including later alterations, and provide permits, approvals, inspection records and insurance documents. Some notices must be given before a purchaser signs, so have your conveyancer check the property, work and dates before you advertise or sign. Do not assume hiring a licensed builder means there are no seller obligations, or that an unapproved structure can be dealt with simply by disclosing it. Also check insurance during the project, not just before sale; the NT fidelity fund scheme includes requirements for owner-builders of prescribed work.

Official sources:

• NSW Working as an owner-builder
• Queensland QBCC Act sections 46 and 47
• Victoria Building Act current version
• QBCC Sell an owner-builder property
• WA Owner-builder approval
• NT Fidelity fund certificate

General information only. Requirements vary by state or territory and change over time, so check the current rules for your location.

What the law requires differs by state, and your lender may require more. Most owner builders carry contract works insurance (the building under construction, subject to policy terms) and public liability insurance (injury or damage to other people and property). Workers compensation may apply if you employ people, and in some arrangements a contractor can be treated as your worker, so check with your state's workers compensation authority. Home warranty insurance is a separate question and is covered in its own FAQ. Ask your insurer in writing what is and is not covered, and give them the correct address, value and start date.

In MyBuildHub: save each policy and certificate of currency in your project documents, and add the renewal and cover end dates to the Timeline.

Check yourself: NSW insurance for owner builders, your state workers compensation authority, your lender and your insurer.

General information only. It is not financial, tax, insurance or legal advice and may not apply to your project. Speak to your lender, accountant, insurer or a lawyer, and confirm requirements with your state regulator.

It is insurance that protects a home owner if a licensed builder or trade does not complete or fix work, and the rules and name differ by state, for example home building compensation cover in NSW and home warranty insurance in Queensland. Names and schemes can change, so check your state's current scheme. It generally applies to work done by a licensed contractor above a set value, and it is often a last resort cover that applies in limited circumstances. It does not generally cover an owner builder's own work. In NSW, home building compensation cover is not available for owner builder work itself, in Queensland owner builders cannot access the Queensland Home Warranty Scheme, and in South Australia owner builders cannot take out building indemnity insurance. Do not assume the rule in one state applies in another. If you hire a licensed contractor, ask for the certificate before work starts and before you pay.

In MyBuildHub: save each certificate against the matching contract, and set a Task to collect it before the first payment.

Check yourself: NSW, Victoria, QBCC, and your state scheme.

General information only. It is not financial, tax, insurance or legal advice and may not apply to your project. Speak to your lender, accountant, insurer or a lawyer, and confirm requirements with your state regulator.

• Budget for post-handover defect rectification.

• Statutory defect periods vary (often 6 to 12 months); statutory warranties and any home warranty insurance (which applies to licensed contractor work, not generally an owner builder’s own work) set their own periods, which differ by state.

• Claims require documentation and prompt action.

• Pause further payments to the builder until you have obtained advice, and check your contract and any statutory payment obligations before withholding money.

• Notify your home warranty/compensation insurer and start the claim process.

• Secure and document the site (photograph works, list deliveries).

• Contact a construction lawyer for legal steps and communicate with any appointed liquidator.

• Collect all invoices, contracts, and bills as evidence.

• Claims are generally limited in value and period (e.g., up to 6 years for defects in NSW); also, replacement builders may be required via insurer approval.

Construction insurance and home insurance are different products, and when one ends and the other begins depends on your policies and your contract. Before handover:

• Ask your builder, or your own construction insurer if you're an owner-builder, when their cover ends.
• Ask your home insurer when your policy should start, and tell them about any renovation or extension.
• Check with your lender, if you have one, whether they require cover to be in place from a certain date.

Related FAQs: What is Home Building Compensation Cover (HBCC) or Home Warranty Insurance? · What insurance is legally required for owner builders and home renovation projects?

This is general information only and is not insurance advice. Speak to your insurer or a licensed insurance adviser about your circumstances.

• Properties in flood or bushfire-prone areas (especially with high BAL ratings) attract higher premiums.

• Insurers may require mitigation (approved materials, design changes, site location) to lower risk and cost.

• Contracts can include escalation clauses to allow for material/labour cost increases.

• Negotiate for capped increases, transparent cost indices, or fixed-price contracts.

• Always budget for contingency funds to cover unexpected rises.

• Larger electricity supply (e.g., three-phase), bigger water meters, amplified sewer services, and NBN pit/connections may be required depending on property type and development intensity.

• These must be assessed and confirmed with relevant authorities prior to contract signing. Hidden upgrade charges can be substantial.