Insurance in Sectional Title Schemes: What’s Covered and What’s Not

What the Body Corporate Must Cover

Under STSMA section 3(1)(h), the Body Corporate must insure the buildings to their full replacement value against fire and other risks as prescribed. In addition, it may, by special resolution, insure against further risks identified by owners.

The minimum risks prescribed in section 3(1)(h) read with regulations include:

• Fire and lightning

• Explosion and smoke

• Storm, tempest, windstorm, hail, and flood

• Earthquake and subsidence

• Water escape, bursting or overflowing of tanks, apparatus or pipes

• Impact by aircraft or vehicles

• Riot, strike, lock-out, labour disturbance, civil commotion, or malicious damage

• Housebreaking or attempts thereat

This statutory cover ensures that both the common property and the structural elements of sections (walls, roofs, foundations, etc.) are properly protected. Trustees must also ensure premiums are paid and provide proof of cover to owners at the AGM.

What Owners Must Cover

While the Body Corporate covers the building, section 14 of the STA makes it clear that owners may (and often should) take out additional insurance for risks not covered by the Body Corporate’s policy.

This includes:

• Interior finishes, improvements, and fittings

• Household contents like furniture, appliances, and electronics

• Personal liability for accidents inside the unit

Importantly, section 13(1)(c) requires owners to “repair and maintain their section in a state of good repair, and in respect of an exclusive use area, keep it clean and neat.” This duty ties directly into insurance: owners must ensure that if damage occurs, they are covered for their own obligations.

Special Note: Geysers and Water-Heating Installations

Insurance claims often arise from burst geysers. Prescribed Management Rule 31(1) clarifies that although geysers form part of the common property and are insured by the Body Corporate, the cost of maintenance, repair, and replacement falls on the owner of the section it serves. Where a geyser serves more than one unit, costs must be shared on a pro-rata basis among the affected members.

Common Exclusions to Watch For

Even with statutory cover, some exclusions apply:

• Wear and tear or lack of maintenance

• Damage caused by unauthorised alterations

• Gradual damage such as damp or rot

• Personal belongings inside the unit

For these, owners must rely on their own additional policies.

Claims and Compliance

When damage occurs, trustees or managing agents usually handle claims related to common property or building structure. Owners must handle claims for their personal cover. It is always best to:

• Keep maintenance and insurance records

• Store policy documents safely

• Report damage promptly

• Understand your rights to request proof of the Body Corporate’s policy under STSMA section 3(1)(s)

Final Thoughts

Insurance in sectional title schemes is a shared responsibility rooted in South African law. The Body Corporate must insure the building and common property, but owners must insure their own units and contents. Knowing your responsibilities under the STSMA and STA helps prevent disputes and ensures that no one is left financially exposed.

Need clarity on your scheme’s insurance or your personal cover? Cenprop Residential can guide you through the process and ensure compliance with the law. Contact us today.