In a recent social media discussion, the question was raised regarding how the scheme should deal with a situation where a third party accidentally causes damage to common property like a security gate.
There are two aspects to consider here:
- Damage to gate caused by a third-party vehicle (caused by driver, damage to gate) = IMPACT DAMAGES CLAIM.
- Damages to a third-party’s car – claim against body corporate (caused by body corporate gate, damage to vehicle) = LIABILITY CLAIM.
This can become more complicated when numbers 1 and 2 above are claimed, where parties are in dispute on why and how it happened.
Impact damages claim
Let’s image the scenario: A vehicle and its trailer accidentally hits the gate upon driving out of the gates, damaging the gate. This is deemed an impact damages claim, both from an insurance point of view and a sectional title point of view. Regulation 3(f) refers. (See page 8 of the Sectional Title Insurance Guide)
Once an insurance claim is submitted, all rights in respect of that claim are subrogated to the insurer. This means that the insurer steps into the shoes of the insured. Subrogation is the substitution of one person or group by another in respect of a debt or insurance claim, accompanied by the transfer of any associated rights and duties.
If you have an insurance claim, it is important to understand that where there is any chance to recover costs from another party, your insurer use the right of subrogation in the process to recover some of their costs.
Where there is an excess, it needs to be paid by the insured, i.e. the body corporate. If the body corporate interferes, accepts or demands excess from the third party, they are affecting the insurer’s rights to recover or settle outstanding recovery. The insurer will immediately reverse any claim under these circumstances.
For that reason, the golden rule is to claim from the body corporate’s insurer, providing the insurer with all relevant details as well as the details of the driver. The incident should be reported at the local SAPS by a trustee so that there is a reference number for both the body corporate’s insurers and reference can be made for the vehicle insurer. The insurer will pay the claim, net of excess.
Thereafter, the insurer may recover costs, either from the third party directly or via their insurer. Most insurers will, after a full recovery, reimburse the recovered excess but some do not, as recovery costs are incurred by the insurer. Note that insures are not obliged to reimburse excess, as the excess is part of the policy agreement in the event of a claim.
The third party should also advise their own insurer of a possible recovery claim from the body corporate’s insurer. No party should admit liability.
Author: Mike Addison
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