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Can Trustees Elect to Exclude Geyser Cover?

Is it possible for trustees of a body corporate to exclude or remove geyser cover?

In short, they may not but steps can be taken to reduce exposure.

The Sectional Titles Act itself along with the proposed new STSM (Sectional Titles Schemes Management Act) and new regulations refer to insuring against fire and other risks that may be prescribed.

Prescribed rules refer to the need to insure against “bursting or overflowing of water tanks, apparatus or pipes”. Therefore, unless the rules of the body corporate have been amended, the geyser needs to be insured against bursting.

Present rules state that the owner is responsible to maintain his or her own geyser. The reality is that geysers very rarely “burst” but rather rupture after a few years when maintenance has been neglected. More about geyser maintenance can be found here.

There are three ways of dealing with geyser excess, depending on the dynamics of the scheme and needs of the owners.

  1. You can effectively remove some, or most cover by way of excess, or
  2. You can buy back excess, or
  3. You can just remove some of the maintenance portion of cover.

Our view is that should the trustees wish to effectively remove any of the geyser insurance replacement cost exposure, they should first:

  • Apply their minds carefully to the best needs of all the owners collectively
  • Never remove the geyser cover entirely, especially “bursting” and any sudden resulting damages cover
  • Only use the excess mechanism to increase the insured’s (owner’s) portion of payment
  • Take advice from a specialist sectional title insurance advisor
  • Communicate decisions taken to owners so that owners can better plan their finances

For more about the often debated geyser cover, see a previous article.


Author: Mike Addison

Contact Addsure – The Leaders in Sectional Title Insurance – to get fit and proper advice from advisors who understand sectional title. Contact us in Johannesburg on (011) 704-3858; in Durban on (031) 459-1795 and in Cape Town on (021) 551-5069