Rent or own in a complex? Here’s what you need to know about your insurance

If you live in a flat, townhouse, or apartment that’s part of a complex, there’s a good chance your home forms part of what’s known as a sectional title scheme. That means there’s already insurance in place, usually paid for through your monthly levies. But this can be a confusing area. A lot of people don’t know what’s actually covered under that insurance, what falls on the individual owner or tenant, and what happens when something goes wrong.

Here is all you need to know, whether you rent or own your flat.

If you rent a flat in a complex

When you’re renting, it’s easy to assume that the landlord or body corporate has everything covered. But that’s not entirely true, and it’s worth knowing where the responsibility lies so you’re not caught off guard if disaster strikes.

What’s already covered

The body corporate is responsible for arranging insurance on the structure of the building. For example, anything that is a permanent fixture. Things like:

• Walls, floors, and ceilings
• Built-in cupboards and fitted kitchens
• Plumbing and electrical wiring
• Shared areas like stairwells, corridors, and roofs
• Hot water systems (although there are exceptions, see geysers below)
• Fitted inverters and solar panels.

So if a pipe bursts inside a wall or a fire damages part of the building, the body corporate’s insurance usually pays to repair the damage to the structure, but not the furniture or décor.

What isn’t covered

The body corporate’s insurance won’t cover anything that isn’t permanently part of the building. Think of it like this: if you had to tip your home upside down and shake it, everything that fell out is what isn’t covered. Here are some examples:

• Furniture, electronics, appliances, and clothes
• Rugs, curtains, blinds, and other décor
• Personal belongings of any kind
• Accidental damage you cause to someone else’s property (e.g. leaking water to the flat below)

If you’re renting, you need to take out your own home contents insurance to protect the things you’ve brought into the space. You may also want personal liability cover in case you accidentally cause damage to someone else’s unit or the shared spaces. This is usually part and parcel of home contents insurance.

If you own the flat

As the owner of a sectional title unit, you automatically share responsibility for maintaining and insuring the complex together with the other owners. The good news is that your levies already contribute to insurance for the building, but that doesn’t mean you’re off the hook entirely.

What the body corporate’s insurance covers

By law, the body corporate must insure the complex to its replacement value, which includes:

• The physical structure of your unit and other units
• Common property like lifts, stairwells, driveways, boundary walls, and gates
• Fixed fittings and features, such as built-in cupboards, flooring, toilets, showers, etc.
• Liability cover (in case someone is injured on the common property)
• Fidelity cover (in case the scheme’s funds are stolen or mismanaged)

This insurance is mandatory under the Sectional Titles Schemes Management Act, and it’s renewed annually, often in consultation with an insurance broker.

Where your own insurance comes in

Your personal belongings

Everything inside your unit that isn’t permanently installed, like furniture, appliances, clothing, and décor, needs to be covered by your own contents insurance.

Upgrades and renovations

The building’s policy covers “standard” finishes. If you’ve upgraded to stone counters, custom cabinetry, designer tiles, or anything else above standard spec, you’ll need to request an increase to your unit’s insured value through the body corporate. This is often called an “additional sum insured”, and the extra cost is usually added to your levies.

Liability cover inside your unit

If someone slips and gets injured in your unit or if you cause damage to another unit (say, your dishwasher leaks into the flat below), the body corporate’s insurance won’t help. Personal liability cover can protect you in these situations.

The geyser question

Geysers are one of the biggest sources of confusion and frustration in complexes. While most people assume the body corporate or their insurance will simply cover any burst geyser, it’s not always that straightforward.

Technically, maintaining a geyser is the owner’s responsibility, even if it’s located on common property. This includes replacing it when it wears out.

However, many insurers now include geyser replacement as part of the building policy, often under a specific “geyser section” with its own conditions, limits, and excesses. These claims are usually handled through a dedicated call centre.

Things to check:

• Does your scheme’s policy cover geyser replacement, or just the resulting water damage?
• Are wear-and-tear replacements included?
• Is there a capped benefit or a separate excess?

So, what do you do if something goes wrong (whether you rent or own)?

Let’s say your flat is damaged in a storm, or a pipe bursts inside your wall. Here’s how claims generally work:

Notify the owner (if you’re renting), managing agent or trustees

The body corporate is technically the insured party, so claims need to go through them. Some insurers allow owners to report claims directly, but they’ll still want confirmation from the body corporate.

Submit proof and supporting documents

This usually includes a claim form, photos, damage reports, and quotes. For larger claims, the insurer may appoint a loss adjuster to assess the damage.

Wait for the assessment and payout

Simple claims (like geyser replacements) can be settled within days. More complex ones may take longer, especially if there’s debate about whether it’s wear and tear or sudden damage.

How to stay on top of things

If you’re not sure what your flat or complex is insured for, here are a few ways to get clarity:

• Ask your managing agent for a copy of the building insurance schedule
• Check when the last replacement valuation was updated (this should happen at least every 3 years)
• Find out what’s covered under your unit’s current insured value and whether it includes any upgrades you’ve made
• Make sure you have contents and liability cover in place, especially if you’ve furnished your flat or made improvements

The body corporate takes care of the insurance on the structure of your flat and the common areas, but that doesn’t mean you’re fully covered. Whether you rent or own, it’s up to you to protect your belongings, any upgrades you’ve made, and your own liability.

The bottom line?

Living in a complex comes with built-in insurance for the building, but that doesn’t mean everything’s taken care of. Whether you rent or own, it’s up to you to protect what’s inside your four walls and make sure you’re covered if something goes wrong. A quick review of your cover now could save you a lot of stress (and money) later.