Sectional Title Excess Revised - 10 Sep 2009 21:04
While body corporates take the hassle out of insurance by insuring all sectional title units under one, combined home insurance policy, which homeowners contribute to as part of their levy, it can cause some hassle in terms of excess payments. When claiming from this single policy, individual owners pay for the excess. Many argue that since the body corporate decides and agrees to a policy that affects all owners, the body corporate should be responsible for paying the excess.
Up until the amendment to the Sectional Title Act, insurance excess was left up to the discretion of trusties, unless voted otherwise by members. The amendment to the act however, has resolved the problem by stating that unless otherwise decided by the body corporate, homeowners are responsible for any excess payment regarding their section even though the body corporate entered into the insurance agreement.
Thus excess is payed by the owner of the home suffering loss. Where the loss was incurred between two or more owners, each contributes a percentage of the excess in terms of the amount of damage suffered. Damage to common property is usually the responsibility of the body corporate – although no expressed amendment has confirmed this.
While sectional title owners don’t determine their cover for the structure of their unit, the body corporate is under obligation to look after the interests of all owners and should update replacement values at least every three years. If you’re not a member of your body corporate, you might have just found your reason to become one.
While body corporates take the hassle out of insurance by insuring all sectional title units under one, combined home insurance policy, which homeowners contribute to as part of their levy, it can cause some hassle in terms of excess payments. When claiming from this single policy, individual owners pay for the excess. Many argue that since the body corporate decides and agrees to a policy that affects all owners, the body corporate should be responsible for paying the excess.
Up until the amendment to the Sectional Title Act, insurance excess was left up to the discretion of trusties, unless voted otherwise by members. The amendment to the act however, has resolved the problem by stating that unless otherwise decided by the body corporate, homeowners are responsible for any excess payment regarding their section even though the body corporate entered into the insurance agreement.
Thus excess is payed by the owner of the home suffering loss. Where the loss was incurred between two or more owners, each contributes a percentage of the excess in terms of the amount of damage suffered. Damage to common property is usually the responsibility of the body corporate – although no expressed amendment has confirmed this.
While sectional title owners don’t determine their cover for the structure of their unit, the body corporate is under obligation to look after the interests of all owners and should update replacement values at least every three years. If you’re not a member of your body corporate, you might have just found your reason to become one.