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Sectional title insurance: What should a new owner be looking for?

Embarking on the home-ownership journey, particularly for first-time buyers in a sectional title setting, demands careful attention to insurance matters. This enlightening article delves into crucial aspects of sectional title insurance, emphasizing key considerations for new owners. Additionally, we suggest consulting resources such as ‘Buy your First Home’ by Zamantungwa Khumalo and ‘Demystifying Sectional Title’ by Marina Constas and Karen Bleijs for comprehensive guidance.

Whether examining policy schedules, valuations, or seeking clarification on coverage, this concise article aims to empower new property owners with essential knowledge to confidently navigate sectional title insurance intricacies. Here are eight points to be mindful of:

  1. Distinguish between contents and buildings:

Understand the disparity between insuring buildings and contents. In a sectional title environment, the body corporate insures the buildings, while you must independently insure your contents.

  1. Verify section insurance coverage:

Ensure the body corporate has insured your section and comprehend the extent of coverage. Obtain the policy schedule and Schedule of Replacement Values (SRV) to evaluate adequacy. Consult the scheme’s insurance broker for clarification.

  1. Regular valuations:

Confirm that the buildings were valued within the last three years, as per the body corporate’s obligation. Obtain a copy of the formal valuation, crucial for potential adjustments and for assuring the bank regarding security.

  1. Consider additional sums:

If you’ve enhanced your section, discuss adding these improvements to the replacement values. Seek advice from your portfolio manager or the scheme’s insurance broker and inform the body corporate of significant improvements.

  1. Fidelity and liability cover:

Request confirmation of adequate fidelity and liability cover in accordance with legislation. Understand the coverage details and limitations. Obtain the scheme policy schedule and wording from your broker.

  1. Be aware of excess structures:

Take note of the first amounts payable, especially for specific items like laminated flooring. Understand the excess structures for various components.

  1. Geyser insurance considerations:

Pay special attention to geyser insurance arrangements. Ensure the scheme addresses geyser aspects effectively, exploring risk mitigation measures that can reduce insurance costs.

  1. Ask for clarification:

Never hesitate to ask your insurance advisor to explain aspects of community scheme insurance or provide additional resources. Remember, your insurance advisor is there to offer guidance, and asking questions ensures you get the full value of their service.

In conclusion, these eight key points serve as a fundamental insurance compass for new sectional title property owners. Armed with knowledge about insurance considerations, legalities, and more, you can confidently navigate the complexities of sectional title home-ownership. Stay informed, ask questions, and enjoy a seamless and secure home-ownership experience.

Author: Mike Addison

Addsure is a leading sectional title insurance broker. Get fit and proper advice from advisors who understand sectional title.