What Is Insured? Pt 2
WHAT IS INSURED ON MY POLICY? – Community Schemes Part 2
Last week we took a brief look at what is insured in a community scheme based on the premium summary page of your policy schedule. To follow on we are going to breakdown a few examples of the different building sections of the policy schedule from different insurance companies and what the different information represents to you.
Under the buildings section there is an address represented, this is the complexes risk address, so it is always important to ensure this is correct.
Next to that is the sum insured amount of R 30 000 000.00 and the premium charged for this cover.
Below that you will see it reflects the type of roof construction that the complex has in place, when it refers to standard, this is a standard tiled roof however if it were thatch or slate it would be reflected differently here. The wall construction references the same standard, this for your standard brick and mortar wall however if you had a Plexiglas or palisade fence it would be reflected as such.
Under this you see it speaks of No. of Units, this refers to the total number of units in the complex and the No. of living units refers to the number of occupied units in the complex. it is important to check this is always correct as well as ensure the broker and insurer are advised of unoccupied units.
Next is the Contents cover this shows the complex has R 100 000.00 cover. This is cover only on items which the complex owns and not for the individual unit owners contents.
The tenants’ fixtures and fittings here is Nil as there is no cover on this policy for this. However, in some complexes it may be requested to include the fixtures and fittings that the tenant has added to the various units and then there would be a sum insured amount for this next to it.
The specified items referred to here, are another way that the all-risk items are represented on the insurance policy schedule. In our What is Insured Part 1 you will note that this was explained in detail. Some insurance companies reference the items like the above example and not under a separate section called Business All Risk / All Risk.
From this you will see the specific items that are specified with their description, the amount they are specified for (this is normally linked to the replacement cost) and the premium that is payable for each item.
Above you will see it mentions situation, this is the complexes risk address, so it is always important to ensure this is correct.
Beneath that is the sum insured and premium of the building represented.
The total units that are referenced here are the total number of units for the complex, it is important to check this is always correct.
Underneath this is the total sum insured; this is the total of the complex’s insurance cover for all the building fixtures. If there were additional buildings that needed to be reflected for example domestic quarters or other areas, then this may be represented about this amount and the total sum insured would be adjusted accordingly.
Standard Escalation is additional cover of 10% that is allowed for by the insurance company at no additional cost.
Standard Inflation is additional cover of 10% that is allowed for by the insurance company at no additional cost.
The difference between escalation and inflation is as follows: Inflation is the rate of increases in prices over a given period of time for insurance this is normally for a 12-month period. Inflation is normally a broad measure for example increases in cost of living for the country. With escalation this extends the policy to include cover during the current period of insurance, to ensure that the value of the property is increased during the insurance period to avoid under insurance.
The loss of rental figure is 30% of the total sum insured plus inflation that is allowed for that was explained in our What is Insured Part 1 as to what this specific cover is for.
Here your will see situation of premises, this is the complexes risk address, so it is always important to ensure this is correct.
The sum insured and premium amount reflected as well as the total sum insured.
This also reflects the type of construction of the complex as explained above concerning Picture 2.
As various insurers policy schedules differ, the information represented is the same, the way it is laid out is different. We hope this helps you to know what to look for, and if you know what to look for, you should be able to navigate any insurance policy schedule!