Sectional Title Insurance - Just the Basics
Category Owners Advice
What Is Sectional Title Insurance?
Sectional title insurance is a type of property insurance covering sectional title buildings like apartment blocks. Owners might brush it off in hopes that the body corporate has it covered. But understanding the extent of sectional title insurance isn't just important for your budget bottom line. It's important for knowing where you are (and are NOT) covered. Thankfully, it's not rocket science and after reading about the basics you'll be better positioned to make your own insurance decisions.
Who Pays for Insurance in Sectional Titles?
All section owners are liable to contribute payment towards the sectional title insurance policy. But if you're an owner and you've never seen an invoice for the insurance payments, that's because your sectional title insurance contributions are included in your levies. After the portfolio manager collects levy payments from all of the owners, the pooled funds are used to pay for the sectional title insurance. The exact contribution an owner makes is also typically tied to the size of the unit - the bigger the section the bigger the contribution.
What's Covered by Sectional Title Insurance?
An easy way to understand what's covered by sectional title insurance is to imagine if you could pick up the apartment block and turn it on it's side. Everything that would fall out is NOT covered. So, the immovable structure - walls, roof, flooring - are covered in the case of resultant damages or destruction. Standard cover is usually for fires, floods, strong winds and burst pipes but be sure to check your body corporate's policy for specifics.
What's the Deal with Excesses?
Excess is an amount a person pays when they make an insurance claim. According to Claims Facilitation Services Head of Department, Monique Siers excess payment is one of the most commonly misunderstood elements of sectional title insurance. The Sectional Titles Act defines the rule of thumb. If you're claiming, you're liable for the excess even in cases where the cause of damage originated from another owner's unit. Consider the following scenario: an occupant in a second storey unit forgets to close the taps while running a bath. The water overflows and seeps through the floor into the unit below. The ceiling in the first storey unit below suffers water damage and the unit's owner wishes to claim. The Act states that the first storey unit owner must pay for any excess costs where a damages claim was made. However, they're then able to claim that excess back from the owner of the flat above. If you have any difficulty claiming the excess back, you can also approach the ombudsman for assistance.
Are You Getting the Best Deal?
If you haven't read your sectional title policy yet, you can always request that your portfolio manager sends you a copy. They will more than likely be happy to help! That being said, sectional title insurance policies ought to be re-evaluated every year before the annual general meeting. It's the duty of the trustees to ensure that the sectional title scheme is paying for the most beneficial insurance policy. Thankfully, there are dedicated service providers specialising in sectional title insurance such as Claims Facilitation Services. They can do all the leg work for trustees and body corporates to find the best possible solution for their needs.
About Claims Facilitation Services
Claims Facilitation Services (CFS) processes insurance claims for managing agents, trustees, body corporates, homeowners associations, and private owners. With cloud-based forms and a team of dedicated claims officers, they fight your insurance battles so you don't have to. Their dedicated, and friendly claims officers are here to take charge of the entire claims process for you - from submission to payment. We're with you every step of the way. Submit your insurance claims requests anytime, anywhere using their easy-to-use cloud-based system.
Author: Paul Wasson
