Insurance advice for sectional title: Key documents and processes

(Updated 10 January 2025)

Sectional title insurance can often feel complex, but with the right guidance, trustees and managing agents can navigate with confidence. At Addsure, we place much emphasis on fit and proper advice with the trustees in mind, by, ensuring compliance in a simple and practical way. Here’s an overview of the key documents and processes involved in our advice framework.

The pyramid of advice – a comprehensive top-down approach

Our unique pyramid of advice ensures that trustees, scheme executives, and managing agents receive structured, clear, and actionable guidance. At the core of this approach are three essential documents:

The letter of advice (LOA)

The LOA forms the apex of the pyramid. As a critical requirement under the Financial Advisory and Intermediary Services Act (FAIS), it outlines the essential details of your insurance policy, including compliance criteria. The LOA offers:

A comparison of current and future insurance arrangements.

Analysis of sum insured adjustments and premium changes.

Recommendations based on comparative quotes to ensure the best fit for your scheme.

Renewal pack (RP)

This set of documents supports the LOA, providing detailed insights into benefits, quotes, and coverage. It ensures trustees are informed about policy terms, premiums, and any recommended changes.

Schedule of replacement values (SRV):

The SRV is an annual document that sets out the replacement values for your scheme. Unlike policy documents, it is a standalone report prepared with meticulous attention to detail. Addsure offers this service as part of our comprehensive advisory package, saving trustees and managing agents the hassle of preparing these schedules themselves.

Why this advice process matters

Our advice framework isn’t just about ticking compliance boxes, it’s about protecting the interests of all stakeholders, i.e. trustees, managing agents, and property owners. Here’s how it makes a difference:

Transparency – Clear documentation allows trustees to understand and evaluate their insurance coverage.

Protection – Properly structured advice shields trustees and scheme executives from potential liabilities.

Informed decision-making – By providing a comparative analysis and recommendations, we empower trustees to make well-informed decisions based on our professional advice.

Beyond the documents – commitment to excellence

It is critical that renewal documents received from the insurer are not simply “handed over” to the scheme. The broker should provide structured, written advice that breaks down the insurance information into digestible steps. Whether it’s a deep dive into claims ratios (see our YouTube channel and articles for more), or understanding the nuances of policy benefits, our team is here to guide you. We have set up plenty of resources to support trustees throughout all aspects of the insurance process.

Supporting resources

For a deeper understanding, explore our Sectional Title Insurance Guide, (blue link button below) which underpins our advice pyramid. This resource provides a comprehensive overview of community scheme insurance, ensuring trustees have all the tools needed to protect their schemes effectively.

We have also included a video below which includes more graphic detail in respect of the above.