Sectional title insurance

Sectional title trustees and managing agents have a responsibility to ensure that the insurance premiums for the scheme are paid - and that their insurer has no reason to repudiate legitimate claims.

Sectional title expert Mike Spencer of Platinum Global notes in Property24 that most insurance policies are carefully written to explain clearly what is covered and what is not - but that all too few people read all the "small print" until they need to make a claim.

Some of the reasons that claims on the insurance for a sectional title scheme could be repudiated are:

• No annual fire-fighting equipment inspection, leading to poor and non-functional equipment.
• Under-insurance. This is a very common problem - exacerbated by the fact that it is difficult and expensive to obtain proper replacement-cost valuations of a whole building or sectional title scheme.
• Use of equipment and building materials that are not SABS-approved, such as old geysers and motors.
• A lapsed policy. A false way to save money as it puts everyone in the scheme at risk. Therefore levy contributions must be enforced.