About geysers
Traditionally, geysers are insured under the body corporate's policy, with the affected body corporate member personally liable for the excess on any geyser-related claim.
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However, according to STSM Regulation 3(1), unit owners (and NOT the body corporate) are responsible for the hot-water supply (aka geysers and heat pumps) that serves their section or exclusive use area.
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The irony of insuring geysers
Insurance is designed to cover unforeseen and unexpected risks, yet geyser failures are highly predictable due to wear and tear. Since geysers typically fail after a known period (e.g., 5–10 years), their failure is a certainty rather than a risk. Insuring them is like transferring an expected expense rather than protecting against an uncertain loss.
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Additionally, when homeowners know their geyser is insured, they may neglect proper maintenance, leading to more frequent claims, increased premiums, and inefficiencies in the insurance system.
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On average, by the time your geyser needs replacing, you will have contributed enough in insurance premiums to cover the cost of a new geyser installation. Furthermore, insurers may deduct an excess amount, which remains payable by the affected unit owner.
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What are the alternatives to insuring geysers?
Bodies corporate could exclude geyser insurance from the policy schedule and manage their geyser risk more efficiently through routine maintenance and/or a geyser replacement fund. In fact, the mandatory 10-year maintenance, repair, and replacement plan presents an ideal opportunity to implement this strategy.
This would also prevent geysers from affecting the body corporate’s claims history and premium escalations.
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What the law says about geysers & heat pumps
According to STSM Regulation 31(1), a member must maintain, repair and, when necessary, replace (a water-heating) installation which serves that member's section or exclusive use area.​​
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