Responsibility for insurance excesses – multiple sections damaged

[Updated: 5 February 2025]

Applying the insurance excess correctly when multiple sections are damaged in a claim is often open to interpretation, especially in cases involving storm damage. For this article, we focus on a straightforward claim scenario involving three damaged sections:

• Section 1 (top floor)
• Section 2 (middle floor)
• Section 3 (ground floor)

The cause of the damage was an overflowing bath in section 1.

Damage breakdown:

• Section 1 (top floor): R20,000
• Section 2 (middle floor): R10,000
• Section 3 (ground floor): R10,000
• Total damages: R40,000

Insurance excess for water damage: R10,000

The insurer settles the body corporate as follows:

R40,000 less the R10,000 excess, resulting in a net payout of R30,000.

Since section 1 left their water running and accidentally allowed the bath to overflow, let’s examine how the excess should be allocated.

Understanding the excess rule

Prescribed Management Rule 23.(2) of the Sectional Titles Schemes Management Act 8 of 2011 states: A member is responsible –(b) for any excess amount that relates to damage to any part of the buildings that the member is obliged to repair and maintain in terms of the Act or these rules and must furnish the body corporate with written proof from the insurer of payment of that amount within seven days of a written request.

In other words, an owner is responsible for maintaining their section, which means they are also responsible for any excess applicable to claims made for damage to their section.

Fair allocation of excess

Given this, the excess should be allocated proportionally to the sections that sustained damage. The body corporate cannot act as an adjudicator or claim the excess from the party allegedly responsible for the damage – it can only apply the rule as prescribed.

Proportional allocation of the excess:

• Section 1: Damage incurred = 50% of total damages → 50% of R10,000 = R5,000
• Section 2: Damage incurred = 25% of total damages → 25% of R10,000 = R2,500
• Section 3: Damage incurred = 25% of total damages → 25% of R10,000 = R2,500

The owners of Sections 2 and 3 would need to approach the owner of Section 1 in their personal capacities if they wish to recover their share of the excess.

Final thoughts

This is a simple scenario intended to illustrate the fundamental principles of how excess should be applied in the case of multiple-section damages. In more complex cases, trustees and managing agents should refer to the specific provisions of the sectional title scheme’s rules and seek expert advice when necessary.