Many people who live in sectional title units might not realise that the geyser is not common property; it is part of that section even though it may be located on common property. If it serves only one section, it is part of that section, so the owner would be responsible if the geyser should burst, said Michael Bauer, general manager of sectional title management company, IHFM.
The building insurance of the body corporate would usually cover this insurance claim. There are two types of cover: repair or replacement. Some insurance companies, however, do not offer a repair option, they only offer replacement cover. The excess amounts will vary from building to building, depending on what the trustees decide, what the claims history is and how many replacements have had to be done in that scheme.
There are many who do not realise that most insurance companies offer a “geyser hotline”, where help to find a plumber and replacement is expedited. The insurance company would give the owner details of preferred service providers and in most cases there would be a reduction in the insurance excess payment or, in some cases, no insurance excess payable at all, if the owner uses the insurance company’s preferred service providers, said Bauer.
Trustees should communicate with all the owners in the scheme all insurance details and the procedures to follow in the case of a burst geyser.
“While claims should preferably go through the trustees, because you don’t want everyone in the scheme claiming individually, there might be cases where it is an emergency and the owner cannot get hold of a trustee to get the problem sorted out. It would then help him a great deal if he had all the insurance details on hand,” he said.
The resulting damage is usually covered provided there has been no negligence and that the geyser is compliant and doesn’t infringe on any bylaw, which a plumbing compliance certificate would prove, said Bauer. The insurance would also cover the damage to the unit below or surrounding the unit.
When claiming for a replacement, owners must remember that the insurance companies’ maximum payout is usually R6 000 per geyser claim, less the excess amount, this is the standard unless the trustees have specifically negotiated a higher geyser cover (which would need a higher premium payment).
“When getting quotes to replace the geyser make sure that it does not cost more than this or the extra will come out of your pocket,” said Bauer. “There have been many cases where the owners have received a big shock of a bill of R2 000 or more, because they did not realise that the amount was more than what the insurance company would pay.”
Prescribed Management Rule 68 (7) says that if the insurance company does not cover repair of a geyser, the owner is responsible for the maintenance of it. In some schemes the geysers are excluded from the overall building insurance cover, so owners must be aware of this and check with their body corporate. If this is the case, the owners are responsible for taking out the appropriate insurance for their unit.
“Owners must realise that it is not a “given” that there will be insurance cover, this is an option. Buyers, too, must check when looking at buying into sectional title schemes, what is covered in the insurance policy and what is not.”