The trustees via the managing agent should manage claims. An insurance broker with experience in sectional title insurance matters can assist greatly when claims arise.
An example of a claims procedure (should be amended to suit individual body corpoarte needs):
Body Corporate of XYZ
Procedure : Claiming from Insurance
1. Report an incident / event to the body corporate (contact the managing agent on tel 011 123456) immediately and ask that your claim / possible claim be registered without delay. This must be done within 30 days otherwise the claim is prejudiced.
2. Obtain a claim form from the managing agent and complete this with as much information as possible. Include SAPS case number if applicable and copies of quotes (always 2 quotes) to repair damage / loss. Send this completed and signed claim form to the managing agent as soon as possible. Say two trustees or one trustee and the managing agent (if authorized to do so) should sign claim forms on behalf of the body corporate. Damage from within sections should also be signed by the owner.
3. If urgent that the damage be repaired immediately, try to get the managing agent to obtain authority to repair or get one of the trustees to use their discretion to authorize repair. Retain all salvage for assessment purposes.
4. Obtain opinion from the managing agent in respect of excesses, who would be liable etc so that there is no argument about who has to pay the excess when the contractor needs to get paid.
5. The insurance company will pay a claim (if accepted) less excess. The owner from whose unit the loss emanated may well need to carry this – depending on the management rules of that body corporate.
6. The claim will be paid directly to the body corporate (the insured) or the contractor repairing damage, depending on the express wish of the body corporate.
7. The individual owner should work via the managing agent or trustees.
8. If such a claim is repudiated, and the owner disagrees with such decision, the individual owner should write to the body corporate stating such and requesting that the trustees take up his disagreement with the insurer, asking that the claim be reconsidered. If the trustees agree and the insurer maintains their position, the trustees have recourse via the ombudsman for short term insurance.
9. Should the trustees disagree with the owner i.e. agree that the claim remain repudiated, the trustees may advise the owner who then would have to follow the dispute resolution process with the body corporate.
The owners should receive a copy of the claims procedure including the procedure to follow should they wish to dispute a claim, or dispute a claim repudiated by the insurer.
The body corporate has the insurable interest, i.e. is the insured as far as the insurer is concerned. Any dispute from an owner’s point of view would need to be taken up by the body corporate on that owner’s behalf. If the body corporate disagrees with that owner, it is my opinion that the dispute is then between the owner and the body corporate, not the individual owner and the insurer. The trustees do need to maintain control in the interests of all owners, however, the individual needs to be aware of his/her rights and the procedures to follow when he or she feels wronged.
More about insurance claims can be found at www.addsure.co.za on the Claims Page or a scan of an article published in the First Quarter 2009 issue of Personal Finance magazine on www.addsure.co.za
Questions and Answers about insurance and claims can be found on the forum section of www.sto.co.za and www.sectionalforum.co.za.
Acknowledgement: Cartoon above by Colin Daniel of Personal Finance www.persfin.co.za
From an article written by the author of this blog