How insurance brokers can save you money
Everything you need to know about insurance brokers
Bloemfontein, Free State, South Africa
Are you looking for ways to save money on your insurance? An insurance broker is an option to consider, but can they really save you money? Is hiring an insurance broker worth the effort? If you have questions about insurance brokers in Bloemfontein, South Africa, you have come to the right place.
What laws apply to insurance brokers, and who do they really work for? Can you trust an insurance broker to get you the best deal? Below we look at what insurance brokers do in the South African context, what to expect, questions to ask, and pros and cons to consider.
What does an insurance broker do?
An insurance broker’s job is not the same across the world. In different countries they play different roles and completely different tasks. In South Africa, we have laws that help regulate the insurance broker’s role and guide what they should and shouldn’t do.
In Bloemfontein, an insurance broker works for you, and that means they should work to get you the best deals and results as a priority. They also offer advice and insight into the insurance world, and their advice should be unbiased, reliable, and in-depth. Insurance brokers are sometimes referred to as insurance advisors in Bloemfontein, because part of what makes them so valuable to their clients is the advice they give.
Their work begins with finding out what insurance you need and what your priorities are. Next, they help you find insurance quotes or bundled insurance plans to meet your needs. An insurance broker should discuss your options with you openly and without inhibitions, explaining the pros and cons of each element of the quotes or bundles they present to you.
You should be given the opportunity to ask questions, and the insurance broker should respond candidly. Once you have chosen your insurance package or bundle, the insurance broker should help you get signed up with the insurance provider by helping you fill in forms. They should help you with any processes for insurance providers and they even communicate with the insurance provider on your behalf.
Brokers who help their clients with paperwork, administration, and communication regarding their insurance are a big reason so many people use brokers. They save their clients effort, stress, and time when they assist in this way. Some brokers may be more experienced with certain kinds of insurance or prefer to only work with a specific type of insurance. Make sure you know what kind of insurance they specialise in before hiring them.
Can I save money by hiring an insurance broker?
A broker can be invaluable to their clients, but do they save their clients’ money? There are a few factors that play into the answer. A broker who is reliable and has your best interest at heart could save you money because they prioritise your needs. A broker who does not charge excess fees can save you money if they find you a cheaper plan than you could find on your own.
A broker can also save you money if they are willing to discuss questions and pitfalls, and if they are willing to help you with administrating applications and claims processes. This is because often a good intermediary can represent your needs with the insurance provider and help you get claims you might otherwise struggle to get. It also saves businesses time with doing administrative work, avoiding possible errors and saving the organisation money in the long run.
If an insurance broker is unreliable or biased, you can’t be guaranteed a better deal. In fact, you could end up spending more on insurance. If an insurance broker does not help you with communicating to your insurance provider or with claims processes, you will have no benefit from their services when it comes to claims and administration. If an insurance broker charges excess fees above what they get from the insurance provider, you could still end up spending more.
So, does the work of an insurance broker help you to save money? Well, that depends on the broker, their fee structure, and a few other factors. You need to consider the above when deciding whether to work with an insurance broker.
Broker fees and South African law
There are two laws that apply to insurance brokers: the FAIS Act of 2004 and the Short-Term Insurance Act of 1998. Both laws ensure that brokers give you the quality of service that benefits you, gives you ways to keep brokers accountable, and prescribes what percentages of your monthly premium goes to the broker as commission.
Insurance brokers are required to tell you about any fees they will charge you upfront, and they should not proceed with any work until you have agreed to these fees in writing. Brokers must meet product competency requirements that are updated regularly. This means they will have in-depth knowledge of all the insurance products they work with and can give you all the insights you need to make the best insurance choices.
Information quoted is correct at the time of publishing this article. The information in this article is provided for informational purposes only and should not be construed as financial, legal, or medical advice.