24 reasons why full insurance policy schedules should not automatically form part of AGM packs

In many sectional title schemes and homeowners’ associations, the question regularly arises as to whether the full insurance policy schedule should form part of the AGM pack circulated to owners. Here we are not talking about the Schedule of Replacement Values (SRV) but rather the raw policy schedule.

At first glance, including the full schedule may appear transparent and helpful. Some trustees or owners may feel that “more information is always better.” However, in practice, broad circulation of full underwriting schedules can create confusion, misunderstanding, unnecessary administrative burdens and even avoidable risks for the scheme itself.

This does not mean owners should be excluded from understanding the insurance arrangements of the body corporate or HOA. Quite the opposite. Owners should absolutely be informed regarding insured values, premium movements, major changes, valuation considerations and the overall structure of the insurance programme. The real question is whether raw operational underwriting documents are the most appropriate and owner-friendly communication tool for AGM purposes.

Below are 24 important considerations trustees, managing agents and scheme executives may wish to take into account before automatically including full policy schedules in AGM packs.

1. It creates an expectation of annual inclusion

Once a full policy schedule is included in an AGM pack, owners often come to expect the same level of disclosure every year thereafter. What may initially have been a once-off exercise can quickly become an ongoing administrative precedent that trustees and managing agents feel obliged to continue indefinitely.

2. Mid-year amendments create practical difficulties

Insurance policies are living operational documents that can change throughout the year. Endorsements, underwriting amendments, excess changes, additional covers and restrictions may all arise mid-term. If a schedule is circulated at AGM, a practical question immediately follows: should every subsequent amendment then also be distributed to owners during the year? If not, owners may unknowingly rely on outdated information months later when dealing with claims or insurance queries.

3. Policy schedules may contain sensitive information

Policy schedules often contain more than simply premiums and insured values. They may include bondholder details, underwriting notes, contact information, risk concerns and occasionally owner-related information. Broad circulation of this material may expose information that was never intended for widespread distribution. For example, a temporary exclusion may reflect at AGM time but removed shortly afterwards, but then still present on circularised documents.

4. AGM packs often become public documents

In practice, AGM packs seldom remain confined to owners only. They are frequently shared with estate agents, prospective purchasers, attorneys, tenants, contractors and advisers involved in transactions or disputes. This effectively turns the AGM pack into a semi-public document, which may not always be appropriate for sensitive operational insurance information.

5. Fraud and exploitation risks may increase

The more widely insurance information circulates, the greater the potential risk of fraud, exploitation or abuse. Detailed insurance schedules may unintentionally provide useful information to dishonest parties regarding values, structures, excesses or insurer arrangements.

6. Competitors may use the information for canvassing

Competing brokers, sales-driven intermediaries or even estate agents may use the information contained in schedules for marketing or canvassing purposes. In some cases, isolated figures or underwriting concerns may be selectively used to solicit business or create unnecessary dissatisfaction amongst owners.

7. The schedule is often circulated instead of the proper SRV summary

Very often, the actual information owners require for AGM purposes is a concise Schedule of Replacement Values (SRV) summary rather than the insurer’s operational schedule itself. Unfortunately, the two documents are sometimes confused, resulting in the wrong information being circulated.

8. Underwriting notes may be misunderstood

Certain endorsements, restrictions or underwriting comments may appear alarming when read in isolation and without proper context. A technical underwriting requirement may be entirely normal within the insurance industry yet still create unnecessary concern or misunderstanding amongst owners unfamiliar with insurance terminology.

9. It often leads discussions down “rabbit holes”

Many trustees and managing agents will recognise how quickly AGM discussions can become sidetracked into detailed technical insurance debates. Rather than focusing on governance and operational matters, meetings may become consumed by isolated wording discussions, interpretations and hypothetical claim scenarios that are not truly relevant to the AGM agenda.

10. Premiums cannot be evaluated in isolation

Owners sometimes compare premiums without understanding the broader underwriting environment. Premiums can only fairly be evaluated in context, taking into account claims ratios, prior losses, excess structures, underwriting trends, reinsurance costs, geographic exposure, catastrophe modelling and changes in policy wording. Looking at premium figures alone can therefore create misleading impressions. We often hear “At my other building, which is bigger, we get a much better premium”.

11. Insurance schedules are highly technical documents

Insurance schedules are operational underwriting documents drafted primarily for insurers, brokers and administrators. They are not designed as owner-friendly explanatory guides. Non-insurance persons may therefore easily misunderstand technical terminology, limitations, endorsements or insurer abbreviations, leading to incorrect assumptions regarding cover.

12. A schedule on its own is incomplete

A policy schedule cannot properly be interpreted without the accompanying policy wording, endorsements, memoranda and underwriting conditions. Circulating the schedule in isolation may unintentionally create a false impression that the schedule itself represents the entire insurance contract.

13. Owners may rely on outdated information months later

One of the practical dangers of AGM schedule circulation is that owners may continue relying on old AGM documentation long after the policy has changed. This can create difficulties at claim stage where owners refer to outdated schedules that no longer accurately reflect the current insurance arrangements.

14. Insurance arrangements are operational documents

Insurance schedules are primarily operational documents used to administer the scheme’s insurance programme. They are not necessarily governance documents intended for broad circulation in the same manner as budgets, minutes or trustee reports. Hence the rule requirements for a separate Schedule of Replacement Values (SRV) as opposed to the policy schedule itself.

15. Misinformation spreads easily

In modern schemes, information can quickly circulate through WhatsApp groups, owner forums and social media discussions. Once partial or misunderstood insurance information begins spreading informally, it can become very difficult to correct misconceptions or prevent unnecessary anxiety.

16. Market perception of the scheme may be affected

Certain excesses, underwriting concerns or limitations may appear problematic when viewed without explanation by prospective purchasers or estate agents. Even entirely normal underwriting conditions may create an unfair perception that the scheme is somehow “high risk” or problematic.

17. AGM schedules become outdated quickly in larger schemes

In larger schemes especially, multiple mid-term amendments may occur during the year due to additions, alterations, valuation changes, underwriting reviews or claims developments. This means the AGM version of the schedule can become outdated relatively quickly.

18. Trustees may be drawn into unnecessary technical debates

Trustees may unintentionally find themselves having to defend or explain detailed underwriting decisions that are often highly technical and best dealt with through separate insurance workshops, presentations or owner education sessions rather than formal AGM proceedings.

19. It may create unrealistic owner expectations

Circulating the full schedule may unintentionally create the expectation that every endorsement, clause or underwriting decision should individually be debated or approved at AGM level. In reality, trustees and managing agents still require practical operational flexibility to manage the insurance programme throughout the year.

20. Legislation generally focuses on values and budgets

The legislation generally contemplates owners approving insured values, budgets and governance matters, rather than debating the insurer’s full operational underwriting schedule clause by clause.

21. Selective reading may unfairly damage reputations

Insurance schedules are often technical and nuanced. Selective reading of isolated clauses or underwriting comments without understanding the underlying rationale may unfairly damage the reputations of trustees, brokers or managing agents who may in fact be acting entirely appropriately.

22. Underwriting terminology is often misunderstood

Insurer-specific abbreviations, underwriting terminology and technical language can easily be misunderstood by non-insurance persons. This may unintentionally create distrust, suspicion or anxiety where none is actually warranted.

23. Excess structures evolve over time

Excesses and limitations frequently evolve in response to claims trends, loss experience and underwriting pressures. Isolated disclosure of these figures without broader explanation may encourage emotional rather than informed discussions amongst owners.

24. A concise insurance summary is often more useful

In many cases, owners are substantially better served by a concise insurance summary, explanatory guide such as the Sectional Title Insurance Guide or Owner’s Guide or trustee presentation that explains the insurance programme in plain language. Meaningful communication is usually more valuable than circulating lengthy raw underwriting documentation filled with technical terminology.

Final thoughts

The issue is not secrecy or withholding information from owners. Transparency remains critically important in community scheme governance.

Rather, the real question is whether circulating the insurer’s full operational underwriting schedule in AGM packs truly assists owners or whether it may unintentionally create confusion, misinformation, unrealistic expectations and unnecessary administrative complications.

In many instances, a concise and properly explained insurance summary together with Addsure’s booklets (which are freely available to all) may ultimately serve owners far better than circulation of the raw schedule itself.