Owners in sectional title schemes
believe – incorrectly – that because the body corporate insures the common
property it must pay any insurance excesses (e.g. for a burst geyser).
In fact, the Sectional Title Act provides
that the owner in a sectional title scheme is responsible for all excess
payments on insurance claims – unless the body corporate has passed a special
resolution that it will cover these, in certain special cases.
Prescribed Management Rule 29 (1) requires
the trustees to take reasonable steps to insure the buildings and all
improvements to the common property to the full replacement value and must
negotiate excess amounts, premiums, cover, and insurance rates on behalf of the
body corporate.
The most common insurance claims
relate to damage caused by burst geysers and the problems they cause. Insurance
companies often negotiate a higher excess amount for such claims, to reduce the
overall insurance premium and claims.
Most insurance companies have call
centres set up to deal with the more common claims and on these cases no
excess, or a considerably reduced excess, will usually be payable, provided the
centre is contacted quickly and allowed to send one of their preferred
suppliers to handle the work. Quick action by the owner can save unnecessary
damage to the unit (and to other units).
