How to choose your insurer

We are often asked the question: How do we choose the insurer for our body corporate?

The most important factor

First and foremost, work with a licensed financial advisor (broker) who specialises in sectional title insurance and understands the unique risks of communal living. Their expertise ensures they can recommend an insurance policy that’s specifically suited to the needs of a sectional title scheme.

There are a number of specialist insurance underwriting management companies who administer policies on behalf of insurers and these are the policy products best suited to your need.

The most suitable premium

When choosing an insurer, you need to understand that the most suitable cover is not necessarily the one with the most favourable premium. Trustees also need to act in the best interest of all owners; for example, it may be best that trustees elect a nil excess for geyser replacements with an increased premium. It is also important to check and compare overall excess structure: lower premiums are often achieved by application of higher or raised excess structure.

Some of the more current policies offer cover on an ‘Asset All Risk/Broad Form’ basis. These policies do generally impose a higher premium; however the cover provided is by default wider than that of a standard perils based ‘combined’ policy.

Your advisor should recommend the most suitable option to trustees for their consideration. In order to do this, you should be provided with at least three alternative quotations every year when it is time for renewal of the policy. It is important that such quotations and recommendations are presented with a letter of advice from the insurance advisor. We do not advocate that you chop and change insurers every year but you should evaluate the current market offerings. It is always best advised to retain a long and sound relationship with a reputable insurer.