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Insurance Companies and Financial Service Providers
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South Africans have a wide range of choice when it comes to selecting an insurance company. With over 100 insurance providers offering their services in different fields, it’s no wonder that many find the selection process to be somewhat bewildering.

Nevertheless, insuring your property, assets and valuables is undeniably one of the most responsible and important decisions that you will make in your lifetime – so it’s best done with care.

What Do Insurance Companies Offer?

Insurance is a risk management system that ensures your financial safety in the case of unforeseen events that could cause damage or loss to your property or possessions. In exchange for a monthly or annual premium, an insurance company will cover the expense incurred if any of the predefined risks should transpire. You will generally be required to pay a small prearranged excess towards the replacement or repair of the insured goods, but the balance will be covered by the insurance company.

Insurance companies offer a range of different policies. Most people have more than one insurance policy to cover all of their insurance requirements. The different types of policies on offer range from property, household, travel and health insurance to personal liability, vehicle and life insurance.

How Do You Choose the Right Insurance Company?

Of course the premium charged is always a critical factor in deciding which insurance company is best, but remember that this shouldn’t be the deciding factor. If you make your choice based solely on the premium offered, then you may find yourself inadequately covered or, worse yet, with terrible follow-up service when you lodge a claim.

The wise thing to do when selecting an insurance company would be to look at all of the available options. Realistically, you want the best cover for the best price from a stable, trusted company that is able to handle your claims promptly and professionally.

Personal referrals from friends, colleagues and family are some of the most telling signs of a good insurance company. Additionally, an insurance broker can present you with a wide range of policy options from different insurance companies. If you examine your options through a broker, it is vitally important that they are accredited by the Financial Services Board and have a good understanding of the policies in question.

Make certain that any insurance company that you consider is a registered Financial Services Provider. In addition to this, you should investigate whether there are any hidden costs in the form of additional excesses or premiums that are not quoted up front.

Finally, find out which insurance companies offer a refund after a specified claims-free period. For instance, if you go three years without making a claim then some insurance companies will give you a percentage refund of the premiums that you’ve paid over that timeframe.

How Are Insurance Companies Regulated?

In South Africa, insurance companies are subject to strict regulation under the Short Term Insurance Act, the Financial Advisory Intermediary Service Act, the Policy Holder Protection Rules and the Financial Services Ombud Schemes.

If you have ascertained that an insurance company is a registered Financial Services Provider, you will have a form of recourse in the insurance industry ombudsman. This is part of an effort to ensure that the insurance industry in South Africa remains trustworthy and user-friendly.

Conclusion

There are many factors to consider when choosing an insurance company. Ultimately, you need to find a company that is able to see to your individual budget, risk and service delivery requirements. The benefits of doing your homework before choosing a company cannot be overemphasized. This initial effort will save you a lot of disappointment and hassle further down the line.

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