Quick answer: After a body corporate insurance claim is accepted, the next question is how it will be settled. Some claims are paid by repair or reinstatement, while others may involve cash settlement, contractor payment or payment to the body corporate. Trustees should understand the process before confirming expectations to owners.
Settlement options
- Insurer-appointed contractor repairs.
- Owner or body corporate appointed contractor subject to approval.
- Cash settlement based on an assessed amount.
- Direct payment to supplier, contractor, body corporate or owner, depending on the claim.
What trustees should check
- Who is the insured party under the policy.
- Whether VAT, excesses and betterment have been accounted for.
- Whether the settlement includes all accepted damage.
- Whether the contractor scope matches the assessor report.
- Whether the owner expects cash but the policy allows reinstatement.
Common disputes
- Owner wants cash but insurer prefers repair.
- Assessed amount is lower than contractor quote.
- Matching materials are not available.
- Betterment is deducted where old items are replaced with new.
- Damage includes contents or upgrades not covered by the body corporate policy.
Good communication steps
- Explain the claims process early.
- Keep assessor reports and repair scopes on file.
- Record owner approvals and contractor instructions.
- Clarify who pays the excess before work begins.
Need help reviewing the insurance position?
Lowensvlei Insurance Brokers assists body corporates, trustees and managing agents across the Western Cape with body corporate insurance reviews, renewal checks, water damage claims, public liability, fidelity cover and trustee insurance support. Request an insurance review.
Lowensvlei Insurance Brokers assists body corporates, trustees and managing agents across the Western Cape with body corporate insurance reviews, renewal checks, water damage claims, public liability, fidelity cover and trustee insurance support. Request an insurance review.
This guide is general information for trustees, owners and managing agents. It is not legal advice. Always check the scheme rules, policy wording and current legislation before making final decisions.