One of the most common questions asked by property owners on a regular basis is – “What am I covered for?” or “How does the body corporate’s insurance cover me?”
A simplified response to these questions may be presented by way of the following statement:
The insurance policy indemnifies/protects 1the insured against 2financial loss as a result of 3sudden and unforeseen 4physical damage to 5insured property that occurs at an 6identifiable date/time as a result of a 7single, identifiable cause that is 8not otherwise excluded under the current policy terms and conditions.
In the event of any loss/damage/injury suffered on/about/as a result of the insured property – and before the insurer may accept and settle any claim – the circumstances of the incident must be compliant with the above concepts in bold text. While every claim is scrutinised according to its own circumstances, this will ring true for most possible claim incidents. The above statement may be explained as follows:
- The insured – is the body corporate and only property belonging to, or forming part of, the scheme will be covered. Private property owned by members is not (e.g. vehicles and household contents)
- Financial loss – every claim must have a financial loss aspect to it. No financial loss means no claim.
- Sudden & unforeseen – insurance is all about covering against unforeseeable occurrences that happen suddenly, unexpectedly or without warning. Anything that does not comply with this is generally regarded as foreseeable and preventable or gradual, which means it could either be avoided or at the very least minimised.
- Physical damage – there must be damage to property. If actual physical damage cannot be identified the insurer cannot be expected to provide compensation.
- Insured property – only property included under the various definitions in the policy wording is covered, e.g., ‘buildings’ is defined as including various items but also excluding various items. Property not belonging to, or forming part of, or in the custody and control of, the body corporate would not be included under the body corporate insurance policy.
- Identifiable date/time – the damage must occur at a specified date/time. If a specific date/time cannot be identified, then the damage is in all likelihood not from a single event but has occurred over a period of time and would be seen as gradual deterioration.
- Single, identifiable cause – the actual cause of the damage must be identifiable in order to confirm that it is an insured peril. There are many causes not covered, e.g. wear and tear, defective construction. Insurance does not provide cover for absolutely anything that may occur at or to the insured property.
- Not otherwise excluded – besides the terms and conditions in the policy wording (standard T&Cs) there are also some specific T&Cs in the policy schedule. On occasion, insurers may limit or exclude some cover for specific reasons, such as increased/unacceptably high risk or due to claims history. The insurance policy is a binding contract between the insurer and the insured. Knowing the contents of the contract you have entered into is essential.
Author: Bruce Gibson
Addsure is South Africa’s leading sectional title insurance brokerage. Obtain fit and proper advice from advisors who understand sectional title. Contact our head office, Cape Town (021) 551 5069 who will put you directly in touch with one of our nationwide advisors.