Sometimes an insurance claim for damage to an owner’s section due to an event, may be declined, as such an event is excluded from the insurance policy held by Body Corporate or that held by an owner of a property located in an HOA. Any damage to the building which occurred suddenly, and in a direct and unforeseen manner by a predefined event that is listed in the policy, would typically be claimable.

Damage or losses caused because of wear and tear, ageing, maintenance related, or occurring over a period are ordinarily not covered by the policy. Typically, the following common losses are usually not covered by an insurance policy:

Water penetration over time caused by waterproofing that has failed.

• Damage to a plastered painted slab or painted ceiling occurring over time, due to leaking bath trap or shower in the unit above.
• Water damage occurring when it rains, due to a balcony above leaking into a unit below.
• Damage to water pipes, where pipes may be old, rusty, leaking, or have pinhole leaks.
• Cracks appearing in floor and wall tiles and plastered walls unrelated to any specific claimable event.
• Damp rising in painted plastered walls, or damp penetrating from the external common area.
• Seepage of water, dampness, or mould because of a leaking pipe.
• Any internal rainwater damage due to windowsills or window-frames not being properly maintained by the Body Corporate or owner.
• Damage resulting from poor workmanship by a contractor.
• Damage to an owner’s contents following a storm, fire, etc unless specified.
• Damage caused by tree roots growing into underground sewer pipes over time.

There may be parts of the building that are not covered by the insurance policy, particularly in areas that do not fall within the definition of the buildings, e.g. thatch or canvas awnings above doors and window, signage, certain glass fronts, retaining walls, garden features, wooden decks and balustrades, air conditioning units etc.

This should be clarified with one’s insurance broker when the policy is taken out.

Should an owner not be satisfied due to a claim being turned down, the owner may decide to lodge a complaint with the Ombud for Short term Insurance (OSTI). However, in a Sectional Title scheme, the member of the Body Corporate cannot complain directly to the Insurance Ombud, as the member is contractually not the insured. In terms of the Sectional Title Scheme Management Act, the Body Corporate is the insured and the trustees act on behalf of the Body Corporate.

An owner should complete the Ombud Complaint form, and then submit it to the trustees of the community scheme, to sign and submit on behalf of the owner to the Short-Term Insurance Ombud. Even if the trustees may disagree with the owner’s complaint, it must be sent through to the Ombudsman via the trustees, but may be submitted with an accompanying letter setting out the trustees’ viewpoint, if different to that of the owner. The rights of all parties concerned should be respected.

The Ombud may decide to reject any complaint or original claim form that is not signed as required by the prescribed management rules, i.e. by two trustees or one trustee and the managing agent as these are legal documents, and effectively, the owner is the witness rather than the insured.