What Is Covered? – Sectional Title
Having insurance is fantastic, but it doesn’t really help if you are not sure what cover you have. We want to take a moment to break down what would be covered in a few different types of policies to give you a better understanding of what to look out for and what to make sure you have!
Many owners of Townhouses or Sectional Title units are under the “mistaken” impression that the Buildings or Body Corporate’s Insurance policy covers everything within the complex walls. Almost always this is not the case.
It is the duty of the Trustees of the Body Corporate to ensure that the buildings and all improvements to the common property are adequately insured, while the onus for insurance on all the moveable items, falls on the individual owners. It is important that owners in Sectional Title units insure their own household goods separately to ensure cover, should their unit be broken into.
Body Corporate Insurance is a special offer for the collectives that manage the buildings and communal areas of a residential complex or building.
A Body Corporate Insurance policy covers the building(s), all fixtures and fittings of a permanent nature (e.g. Fitted carpets, cupboards, bathroom equipment, etc.) liability and indemnity insurance against perils that are specified in the Act, as well as other perils that the members may decide are required to include. Perils such as acts of nature (hail, wind, lightning, storms, floods, earthquakes), damage caused by leaking or burst geysers (or water heating systems/apparatus), and its pipes or parts (obviously excluding damage due to rust or normal wear and tear), fire, riots, labour disturbances, and loss of occupation or loss of rent, as a result of these risks, etc., should all be taken into consideration.
One of the most important items on the list of Sectional Title Trustee duties is to ensure that all the buildings and improvements to the common property within their scheme are insured to the right replacement value – this is something that should be discussed at every Annual General Meeting. It is also advised to have the building and improvements professionally valued every three to four years to make sure that the replacement value is reasonable and accurate.
Common property means things like boundary walls, fences, gate motors, entrances, drive or pathways, security equipment, irrigation, swimming pool, braai area, gardens (including garden tools, equipment, and garden/swimming pool area furniture), fire extinguisher equipment, etc.
It is always best to request a copy of your complex’s policy as soon as you can to make sure that you are happy with the cover in place and the replacement value assigned. Chatting to your broker will help you to understand what is covered, what is excluded, and what you need to get covered separately from the policy the Body Corporate has in place already.