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Sectional title insurance: what the body corporate covers, and what you still have to insure
In a sectional title scheme, the law makes the body corporate insure the buildings. That policy has clear limits, and the gaps it leaves are yours to fill.
Body corporate insurance: what the law says it must cover
Every sectional title body corporate must insure the buildings to their replacement value, carry public liability cover of at least R10 million, and insure the scheme’s funds against fraud or dishonesty. Section 3(1)(h) of the Sectional Titles Schemes Management Act 8 of 2011 (STSMA) makes the body corporate responsible:
“to insure the building or buildings and keep it or them insured to the replacement value thereof against fire and such other risks as may be prescribed”Sectional Titles Schemes Management Act 8 of 2011, section 3(1)(h)
The prescribed risks are listed in regulation 3 of the STSMA Regulations, and Prescribed Management Rule (PMR) 23 says the body corporate’s policies must cover them:
- lightning, explosion and smoke
- riot, civil commotion, strikes, lock-outs, labour disturbances and certain politically motivated malicious acts
- storm, tempest, windstorm, hail and flood
- earthquake and subsidence
- water escape, “including bursting or overflowing of water tanks, apparatus or pipes”
- impact by aircraft and vehicles
- housebreaking or any attempt at it
The policies must also cover any extra risks the members resolve to insure, and risks that bondholders over at least 25% of the primary sections require in writing (PMR 23(1)(a)). The premiums are paid from the levies you contribute to the administrative fund (STSMA section 3(1)(a)(iii)).
| Cover | What it’s for | Legal source |
|---|---|---|
| Buildings, at replacement value | The structure, against fire and the prescribed risks above | STSMA s3(1)(h); Regulation 3; PMR 23(1) |
| Public liability, at least R10 million | Injury, death, illness or property damage connected with the common property | PMR 23(6) |
| Fidelity insurance | Loss of scheme funds through fraud or dishonesty by a trustee, managing agent, employee or other agent | PMR 23(7) |
| Other risks | Anything members resolve to insure, or that qualifying bondholders require | STSMA s3(1)(i); PMR 23(1)(a), 23(8) |
These rules reach a lot of owners: by 31 March 2025, 37 613 community schemes were registered with the Community Schemes Ombud Service (CSOS Annual Report (2025)).
That’s a solid floor for the building. The detail that matters to you as an owner is how your own unit is valued within it.
Replacement value, valuations and your unit’s share
The body corporate’s policy must give every unit, and every exclusive use area, its own replacement value, and the buildings must be formally valued at least every three years. PMR 23 sets out how this works:
- A value for each unit. The policy “must specify a replacement value for each unit and exclusive use area”, excluding the land (PMR 23(1)(b)).
- A valuation at least every three years. The body corporate must obtain a replacement valuation of all buildings and improvements it must insure at least every three years, and present it to the annual general meeting (PMR 23(3)).
- Updated schedules every year. For each AGM, it must prepare schedules estimating the replacement value of the buildings and of each unit (PMR 23(4)).
If you’ve renovated or upgraded your unit, the standard value may not reflect what it would cost to rebuild it as it is now. Any owner “may at any time by written notice to the body corporate require that the replacement value specified for that member’s unit or exclusive use area be increased” (PMR 23(1)(b)). You then pay the additional premium that the higher value costs (PMR 23(2)(a)).
How an average clause can affect one unit
A buildings policy may contain an “average” clause, which reduces a claim in proportion if the property is insured for less than its replacement value. PMR 23(1)(c) requires the body corporate’s policy to restrict any average clause to individual units and exclusive use areas, so it can’t be applied to the buildings as a whole. That protects the scheme, but it means an under-valued unit can still be paid out proportionally less.
Our explainer on what the sum insured means on your schedule covers the same principle for your own policies.
Exclusive use areas
An exclusive use area, such as a garden, patio or parking bay allocated to one owner, is still part of the common property (STSMA section 1). It gets its own replacement value on the policy, and the body corporate must ask the owners who hold those rights for an extra contribution towards their insurance and maintenance, unless the rules make those owners responsible for the costs themselves (STSMA section 3(1)(c)). Some parking bays and storerooms are registered as separate utility sections instead, so check your title deed and the sectional plan.
Valuation sets how much the policy pays. The question owners argue about most often is who pays the excess, and that usually comes up with a geyser.
Who pays when the geyser bursts
The owner is responsible for maintaining, repairing and replacing the geyser that serves their unit, even though it is common property insured by the body corporate. PMR 31(1) says so directly:
“Notwithstanding that a water-heating installation forms part of the common property and is insured by the body corporate, a member must maintain, repair and, when necessary, replace such an installation which serves that member’s section or exclusive use area”Prescribed Management Rule 31(1), STSMA Regulations
If a geyser serves more than one owner’s section, those owners share the costs pro rata. Water escape, including a burst geyser, is one of the risks the body corporate’s buildings policy must cover, so damage to the building may be claimable on that policy, depending on the cause and the wording. Burst water apparatus is a regular source of disputes: it made up 15% of the homeowners’ complaints the National Financial Ombud Scheme finalised in 2025, and the most common reason for rejection across homeowners’ complaints was gradual deterioration, lack of maintenance or wear and tear (NFO Annual Report (2025)).
The excess is the part owners often don’t expect. Under PMR 23(2)(b), an owner is responsible “for any excess amount that relates to damage to any part of the buildings that member is obliged to repair and maintain”, and must give the body corporate written proof from the insurer that it has been paid within seven days of a written request. Because PMR 31 makes the geyser the owner’s maintenance responsibility, the excess on a geyser claim will usually fall on the owner whose unit it serves.
Your own belongings damaged by the water are a different matter, and they aren’t on the body corporate’s policy at all. For more on geyser claims, see our guide to geyser and water damage insurance questions.
What sectional title insurance doesn’t cover for owners
The body corporate insures the building. Your belongings, your own liability and anything else outside that policy are for you to insure. The STSMA confirms owners can take out their own cover: an owner may insure their section against risks the body corporate’s policy doesn’t cover, and may also insure against other risks (STSMA section 14).
| What | Usually insured by | Worth checking |
|---|---|---|
| The buildings and common property | Body corporate | Your unit’s replacement value on the latest schedule |
| Furniture, clothing, appliances and personal items | The owner or tenant who owns them, under a home contents policy | Whether your contents are insured at all, and for how much |
| Fitted items such as built-in cupboards, flooring and kitchen units | Depends on the policy definitions | Whether the buildings or contents policy treats each item as part of the building |
| Upgrades you’ve made to the unit | Body corporate, if you ask for the value to be increased | Whether you’ve given written notice and pay the extra premium |
| Your personal legal liability | You, often through a contents or personal liability policy | Whether your contents policy includes it or offers it as an option |
| A landlord’s furniture in a rented unit | The landlord | The tenant’s policy won’t cover items the tenant doesn’t own |
Best Care’s home contents insurance and personal liability insurance pages explain those covers, and our guide to buildings vs home contents insurance deals with the fitted-items grey area.
If you have a bond
The rules build in protection for the bank. The body corporate’s policy must remain enforceable by a registered bondholder unless the insurer gives the bondholder at least 30 days’ notice of termination (PMR 23(1)(d)), and a bondholder can ask the body corporate to record that your interest in the insurance proceeds has been ceded to it (PMR 23(5)). Banks may still ask you for proof of cover, so ask your bank exactly what it needs.
If you want to see that proof for yourself, the law gives you the right to it.
Questions to check with your body corporate
Tick what applies to you to build a list of questions and documents to ask your trustees or managing agent for. This is a checklist, not advice.
If the body corporate is under-insured or won’t act
Start by asking for the policy and the valuation in writing. If that doesn’t resolve it, the Community Schemes Ombud Service (CSOS) can order a body corporate to take out or increase its insurance. Under section 3(1)(s) of the STSMA, the body corporate must produce the insurance policy and the receipt for the last premium when an owner or registered bondholder asks in writing.
Ask for the documents in writing
Request the current policy schedule, the premium receipt, the latest replacement valuation and the replacement-value schedule for your unit.
Raise it with the trustees or at the AGM
The replacement valuation and the annual replacement-value schedules must be presented at the annual general meeting (PMR 23(3) and 23(4)), so that’s the natural place to question them.
Apply to CSOS if it isn’t resolved
Under section 39(1) of the Community Schemes Ombud Service Act, an adjudicator can order a scheme “to take out insurance or to increase the amount of insurance”, or to take action under an insurance policy to recover an amount. Check CSOS’s current process and fees before you apply.
CSOS is busy: it received 16 791 new dispute applications in 2024/25, up from 15 587 the year before (CSOS Annual Report (2025)), so allow time and keep your correspondence in order.
If the problem is an insurer rejecting a claim, rather than the body corporate, the route is different: complain to the insurer first, then to the National Financial Ombud. Our guide to escalating a rejected claim walks through it.
Sectional title insurance FAQs
General answers based on the STSMA and its Prescribed Management Rules. Your scheme’s registered rules and the policy wording decide the details.
Does the body corporate’s insurance cover my contents?
No. The Sectional Titles Schemes Management Act requires the body corporate to insure the buildings, not owners’ or tenants’ belongings. Furniture, clothing, appliances and personal items need a separate home contents policy, taken out by whoever owns them.
Who pays for a burst geyser in a sectional title unit?
Under Prescribed Management Rule 31(1), the owner must maintain, repair and replace the geyser that serves their section, even though it is common property insured by the body corporate. Damage to the building from escaping water is one of the risks the body corporate’s policy must cover, so it may be claimable there, subject to the cause and the wording.
Who pays the excess on a sectional title insurance claim?
Under Prescribed Management Rule 23(2)(b), the owner pays the excess on damage to any part of the buildings that the owner is obliged to repair and maintain, such as their geyser. The test is maintenance responsibility, not simply where the damage started. Check whether your scheme has amended its rules.
How often must a sectional title scheme be valued for insurance?
The body corporate must obtain a replacement valuation of the buildings and improvements it insures at least every three years and present it to the AGM. It must also prepare updated replacement-value schedules for every AGM (Prescribed Management Rule 23(3) and (4)).
Can I insure my sectional title unit myself?
Yes, for gaps. Section 14 of the STSMA lets an owner insure their section against risks the body corporate’s policy doesn’t cover, and against other risks. If you’ve upgraded your unit, you can also ask the body corporate in writing to increase your unit’s replacement value, and pay the extra premium.
How much public liability cover must a body corporate have?
At least R10 million for any one claim and in total for any one period of insurance, or a higher amount if members decide or the Minister prescribes one (Prescribed Management Rule 23(6)).
Do these rules apply in a full-title estate with a homeowners’ association?
No. The STSMA’s insurance duty applies to sectional title bodies corporate. In full-title estates, owners usually insure their own homes, unless the estate’s rules or constitution say otherwise.
Cover the gaps the scheme policy leaves
Questions about cover for your sectional title unit? Contact Best Care. Cover remains subject to underwriting and the final policy documents.
This article is general education, not legal or personal financial advice. It summarises the Sectional Titles Schemes Management Act and its Prescribed Management Rules as at the date shown. Schemes may have amended rules, and cover, excesses and exclusions are governed by the policy schedule and wording. Best Care Insurance Brokers CC, registration 1992/100995/23, Authorised FSP 8754. See the FAIS disclosure.