Is buying insurance products simply a leap of faith? Personal accounts about insurance cover not being adequate at the time of the claim, have aroused scepticism about the insurance industry. “The key is to understand what it is you are buying before the claim happens – learning about the policy at the time of the claim can be an expensive lesson,” says Peter Olyott Managing Director of Indwe Risk Services.
Understand Your Risk
Risk is becoming increasingly complex. Even a really good insurance product is only likely to protect one against some of the total risks one faces in life. Too often people are not given a balanced, objective and encompassing view of the potential risk exposures they face and what options are available to them. A lot of focus is placed on the premium, which attracts most people’s attention and very little emphasis is placed on what one is actually buying for the cheaper premium one is looking for.
A broker will ask you about your personal circumstances, knowledge and understanding of insurance products and other aspects to assist in finding you the right policy. “They’ll also be able to tell you if you’re already covered by your existing insurance policies so you don’t overlap, and they will often get you a good deal by comparing prices and product features,” Olyott explains.
Understanding The Options
There are many different kinds of insurance products available, and each product has different features. Vehicle insurance, for example, can be comprehensive insurance, third party, fire and theft insurance or third party insurance with varying bases of cover such as replacement, retail or market value etc. Advocates of direct insurance will have people believe that off-the-shelf products are sufficient to insure against most insurable risks, but is this true? Insurers won’t always offer you every type of cover when you go directly to them. Brokers can help point out the types of cover available and help you work out what you need.
“It is important to get the right advice and the right product,” says Olyott. “Especially when choosing business insurance. When you consider that the complexity of legal liability and the frequency of claims in South Africa alone has increased significantly since 1996 it is clear one should be receiving objective and professional advice. This applies to the types of legal liability covers available as well as the adequacy of the indemnity limits which a client is buying"
Understanding The Fine Print
What are exclusions, warranties and endorsements and how do they affect you when a claim occurs? What are ‘no claim’ bonuses and do the benefits outweigh the risks? Brokers are not affiliated with one product and can supply the client with different options and explain the fine print so that they can make informed decisions.
"Always ask what additional excesses will apply and do not be afraid to ask the insurance sales consultant to calculate and explain to you how the excesses will apply in each particular situation or circumstance you are concerned with,” Olyott explains.
The Benefits Of Having A Broker
Besides helping clients to understand their risk exposures and finding them the right cover, a broker will also act on a client’s behalf at the time of the claim. It is important to consult with a broker from the beginning to understand the policy ensuring there are no misunderstandings between you, the broker and the insurer at the time of the claim.
There is a need for professional risk and insurance advisors to service both personal and business insurance sectors. Complex risk exposures are not going to become less so, and customers require simple, cost-effective, and modern insurance solutions. Brokers have the knowledge and expertise to meet the increasingly complex and ever-changing demands of modern insurance customers and can provide a service that meets those demands.
As an insurance intermediary, Indwe Risk Services operates in an increasingly competitive market and therefore they are keenly aware of key aspects policyholders should consider when purchasing insurance. Indwe provides expert advice and tailor-made insurance solutions that will suit your particular personal and business insurance needs.