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Sectional Title Owners – Who is responsible for Excess Payments on Insurance Claims?

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).

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Email: info@bmalaw.co.za

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