GOOSE VALLEY HOMEOWNERS ASSOCIATION
SECTIONAL TITLE INSURANCEPlease note that the following conditions apply:
• All Geysers must be serviced every two years and Goose Valley must keep a record of all Service Certificates. There will be no cover for Geysers if this condition is not adhered to.
• There is no cover for Geysers older than ten years. Please note that the above is for the owners own account and cannot be claimed under the Geyser Maintenance Extension of the policy.
• Resultant damage claims, excess will be applicable: R2 500.
CLAIMING – what may one claim for?
For owners and Directors, understanding the difference between an insured event (claimable loss) and a wear -and-tear loss goes a long way in preventing unpleasantness, unrealistic expectations and unnecessary repudiated claims.
If we all understand that a mouldy ceiling or a crack in the wall unrelated to any event is not a claimable event, then there is no reason to become confrontational right up front. Understanding that insurance pays for certain losses, following a sudden defined event, and not every loss incurred through ownership, goes a long way in reducing friction between owners, directors and managing agents.
Despite what may often be perceived, sectional title insurance in South Africa is quite wide in terms of cover, in fact most often wider than one’s standard domestic building policy. Prescribed management rules set out the cover that must be put in place, however, competitiveness in this market has brought fairly low cost insurance and more cover than required over the last few years.
Well then, what is covered?
Firstly, the insurer is covering loss or damage to the building and certain fixtures.
Unforeseen damage to the building caused suddenly and directly by events as listed below, may typically be claimable:
1. Fire, lightning, explosion 2. Wind, hail, storm, snow
3. Burst pipe – not as a result of wear and tear 4. Burst hot water cylinder
6. Accidental damage e.g. spillage of paint on carpets 7. Flood, sudden water damage
8. Damage caused as a result of break –in
Damage or losses caused as a result of wear and tear, ageing, occurring over a period of time would not b e covered.
Typically, the following common losses ARE NOT ordinarily covered: 1. Water penetration over time caused by failing waterproofing
2. Water damage occurring “when it rains” due to leaking balcony from flat above 3. Damage to ceilings, over time, due to bath trap or shower above leaking
4. Damage to pipes, seeking the leak and repairs where pipes are old, rusty, leaking, have pin holes 5. Cracks appearing in tiles and walls unrelated to any specific claimable event
6. Damp
7. Seeping of water, dampness, mould as a result of leaking pipe or pipe with “pinholes” 8. Rain damage as window sill is not waterproofed properly
9. Damage resulting from poor workmanship
10. Damage to a car after wind causes a roof tile to be lifted and fall 11. Damage to an owner’s contents following a storm, fire etc 12. Damage caused by a tree roots growing into pipes (over time)
Parts of the building may not be covered or fall within the definition of buildings e.g. thatch, canvass awning, signage, certain glass fronts, retaining walls, garden features, wooden decks and balustrades etc.
Note that theft from common property i.e. theft of say copper pipe, gate motors, cameras, air conditioner parts, vehicles, maintenance equipment, garden equipment, etc., would also not be covered as a default. Theft is not a requirement in terms of prescribed rules, however, can be requested. Directors need to be aware and enquire as to what may, or may not, be covered against theft. In the case of Goose Valley, the above is insured.
One of the most contentious areas is the “bursting” of pipes event: WHEN IS IT A CLAIM, AND WHEN
IS IT NOT A CLAIM? We simplify as far as possible as follows: TO SUMMARISE:
1. BURST PIPE WITH RESULTING DAMAGE
Insurer should pay for the locating, repair of the pipe as well as the “putting back” e.g. re-tiling and replace any other “resulting” or “consequential” damaged areas e.g. ceilings damaged, carpet damaged etc.
Not an insurance claim – no sudden water damage, loss caused by deterioration.
3. DETERIORATED PIPE, BUT SUDDEN “COLLAPSE” OF PIPE – SUDDEN APPEARANCE OF WATER e.g. RUNNING, POOL OF WATER, FLOW OF WATER
Insurance will usually only pay for the consequential water damage e .g. the ceiling in a flat below that was suddenly damaged. The cost of location of the leak, the repair and the putting back of tiles
etc. is for the owner, or, if common property, for the body-corporate account. The insurer is not necessarily obliged to pay for the consequential damage after a maintenance related loss.
THE INSURER IS NOT YOUR MAINTENANCE PLAN, but rather your insurer i.e. they are there to indemnify the insured against a defined event – very clear – something sudden and unforeseen as described above e.g. a fire, explosion, storm, bursting.
The body corporate is the insured. Section 37 as well as prescribed rules puts the responsibility of managing the insurance with the directors. Claims should, in reality, flow via the directors or their delegated agent so that a certain measure of control / claims management structure is in place.
Directors should not decline claims, per se, however, can prevent unnecessary claiming if something is clearly not a claim e.g. repair of roof needing fresh waterproofing material.
The following analogy demonstrates what is covered under a Body Corporate Insurance Policy:
Imagine having your Unit in your hand and turning it upside down. What WAS the ceiling of the Unit is now the floor. Everything that has fallen onto the ceiling (which is now the floor) is NOT insured by the Body Corporate insurance policy.
This is a simple way of explaining that only the structure of the building and those fixtures and fittings which are of a permanent nature (such as fitted carpets, built-in cupboards and sanitary-ware, etc.) are insured, whilst casual rugs, lounge furniture, kitchen furniture, free-standing stoves and tables, personal goods, etc., are NOT insured in terms of the Goose Valley Homeowners policy, and must be separately insured by the Unit Owner. THE SAME APPLIES TO ANY IMPROVEMENT TO THE UNITS.
GEYSERS
Geysers are still generally housed in the ceilings or in built-in cupboards, and they can mal-function at the most inconvenient times. What is a geyser? How does it work? What should we look out for?
• A geyser is a water tank that is fitted with a heating element which is controlled by a thermostat. The element simply converts electric energy into heat and raises the temperature of the water to a set temperature which is controlled and maintained by the thermostat.
• The two main pipes on a geyser are: one for the inlet of cold water (with a shut-off valve), and one for the outlet of hot water. A third pipe is the overflow pipe which allows any excess water to flow from the pressure-valve.
• The entire steel tank is enclosed inside a metal casing. All geysers should have a drip-tray fitted beneath it, and this tray has a pipe that runs to the outside of the building, OR into the shower.
• All geysers have a self-sacrificing anode which is used to protect the steel tank from corrosion by sacrificing itself and prolonging the life of the tank.
• As the water in the geyser heats up and cools down, one can expect a f airly consistent drip through the pressure-relief-valve at the overflow pipe. The overflow pipe runs away from the geyser and transfers the water away from the building. Losing anything more than a litre or two of water per day indicates a faulty pressure valve, and if there is a steady flow of water rather than a slow dripping, the pressure valve should be replaced.
• IF HOT WATER AND STEAM ARE COMING OUT OF THE OVERFLOW PIPE, this might
indicate a release of the safety valve because of excessive temperatures or pressure. The most common cause is A FAULTY THERMOSTAT. This is a serious situation which must be dealt with IMMEDIATELY. SWITCH OFF THE GEYSER AT THE ELECTRICITY DISTRIBUTION BOARD UNTIL THE PROBLEM IS REPAIRED.
• WHAT TO DO IN AN EMERGENCY:
If your Geyser ruptures (bursts) or springs a major leak, OR the Thermostat does not respond, OR the Release-valve is faulty, your Drip Tray might not be able to cope with the gush of water. If you notice water pouring through the ceiling or running out of the geyser cupboard:
Turn off the electricity supply to the geyser, at the distribution board; Turn off the main water-supply to the Unit;
Open all hot water taps to relieve pressure;
If you know where the tap is that supplies the geyser with cold water, turn it off. *VERY IMPORTANT:-WHEN YOU ARE NOT IN RESIDENCE, CONTACT THE OFFICE TO
HAVE YOUR WATER AND ELECTRICITY TURNED OFF! * WHAT CONSTITUTES A RUPTURED/ BURST GEYSER?
Burst/Rupture can be defined as to: “break or cause to break open or apart suddenly and noisily, especially from internal pressure; explode”
Geysers do not usually explode or burst. They corrode and eventually give in. The reality is that simple wear and tear and corrosion are sped up by lack of maintenance.
In layman’s terms, a geyser is manufactured out of steel, and are glazed inside to prevent the steel and water from meeting and starting the process of corrosion (rusting). A geyser comes off the factory assembly floor, is
transported to the retailer, then to the plumber, then to the consumer where it is finally installed. Along the way it has been bumped around, and sustains glazing chips & imperfections, therefore rust can start forming. However, geyser manufacturers also install a Manganese rod called a “Sacrificial anode”. This removable rod performs a specific purpose through a natural process of decay, until it is totally worn away. It may take 12 to 18 months before the Anode needs replacement. The residue of the rod is transferred to the exposed chipped areas, effectively coating the chips and preventing or minimizing decay. After 18 months there is nothing left of the anode, the geyser speeds up its internal decay process, and within approximately 36 months there are serious mal-functions and
a new geyser is required. This is what our advisors inform us.
WHAT DO THE RULES SAY?
Rule 29 states, among other things, that the geyser must be insured to full replacement cost against bursting, subject to the Directors’ or Management negotiation of excess premium and rate.
Rule 68 states that the owner is responsible for the maintenance of the geyser. This means that the
Homeowners Association must insure the geyser against insurable events, but the
Owner must maintain the geyser. This is clear.
Ideally, Owners should have their geysers serviced every 2 years and arrange for a plumber to change anodes and check geysers for faulty valves, and in this way they will be maintaining the geysers and also reducing costs all round.
Once again, the Insurer will not pay for the consequential damage after a maintenance-related loss caused by lack of maintenance.
This is the challenge. The geyser has become one of the biggest challenges for Insurers, underw riting managers and directors wishing to manage their premiums. We are told that roughly 70% of all claims are Geyser-related. In other words: repairs; replacements; damage resulting from leaking or ruptured geysers, and faulty valves.
QUERIES
Should there be any queries relating to the preceding information, kindly contact the Goose Valley HOA office and we will investigate and report back.
Derél Human Estate Manager
