By Herman Liebenberg – General Manager, Insure City Insurance Brokers

Insurance is supposed to be a simple agreement where you insure your assets for a fixed fee with terms and conditions. Knowing that your assets are safely insured should the unimaginable happen is a great source of peace of mind.

However, many agreements/contracts contain a maze of terms and conditions which most people don’t understand – or interpret differently. Using a broker negates these risks as they are bound by legislation to make sure you understand the terms of the policy and comply with the requirements, which include giving full disclosure and treating the clients fairly. Brokers are your advisors for all insurance-related matters. Similar to using a lawyer for matters related to the law. Make use of the expertise on offer.

This serves two purposes:

1. The broker is in your corner and makes sure that you are protected and treated fairly by the insurance company.
2. They have long-standing relationships with the insurers, guaranteeing that you get the best rate and cover required for your specific need.

Misconceptions regarding insurance brokers:

Insurance brokers are just out to get your business and not look after you as a client.

Unfortunately, the insurance industry’s reputation has been tarnished by unscrupulous agents, brokers, and the like. Since 2012, massive changes have been implemented and the industry is currently regulated under the FSCA (Financial Services Conduct Authority). This was put in place to protect clients from dealing with dishonest agents and brokers. The Insurance act 18 of 2017 is an indication of the constant monitoring and regulation of service providers, intermediaries, and consultants. This is constantly being reviewed.

We pay more if we use a broker as an intermediary.

Nothing could be further from the truth. Your insurance premium remains the same whether you are using the services of a broker or not. The commission paid to the broker is carried by the insurer (Insurance Company) and forms part of the premium (not calculated over and above the premium). There are fees some brokers or brokerages add to this, which are referred to as a “Broker’s Fee”. It is within the broker’s mandate to charge it for their services in terms of admin and managing your policy. But if you are paying R2 000.00 per month without a broker, you will pay R2 000.00 with a broker. Brokers may even be able to negotiate a better rate, which could save you money.

Benefits of using an industry-specific broker

• Brokers can advise you regarding appropriate product choices for your needs and requirements.
• Brokers can provide you with quotes from a variety of different providers, making sure you get the best product at the best rate.
• Brokers can negotiate better terms or premiums, especially if they have the client’s insurance history on file and can leverage it against the insurers.
• Brokers will ensure the correctness and completeness of your policy schedule.
• A broker will manage any administrative amendments to your policy and deal with queries pertaining to your insurance and insurance cover.
• Brokers can assist with claim submission, administration and negotiating settlements on the client’s behalf.

As you can see, there is zero benefit from not utilising the services of a broker regarding your insurance needs. It’s to your benefit to have someone who knows the industry guiding you, the client, through the obstacles and pitfalls of insurance and insurance products.