Important Information About Paying Your Insurance Premiums
On the 9th of July, the Kenya Gazette Supplement Number 113, announced the amendment of the Insurance Act. What does this mean?
It means that insurance intermediaries such as brokers and agents are no longer authorized to collect premiums on behalf of insurance companies. This means that your premium payments should go directly to the insurance company that you are buying insurance from. This move has been put in place to reduce incidents of intermediaries owing insurance companies a lot of money in premiums, and to protect insurance companies from instances where:
- Intermediaries extended credit to customers without the knowledge of insurance companies.
- Intermediaries collected and held client monies, and only passed these funds onto insurance companies when a claim is lodged.
This is also to protect customers from unscrupulous agents who may collect premiums and fail to submit them, exposing clients to unpaid claims.
This, however, does not eliminate the need for insurance intermediaries. In my video about buying car insurance, I highlighted the importance of buying insurance through an agent, as opposed to going directly to the company.
Some of the benefits include:
- An agent may be able to negotiate better rates because of the volume of business they direct to the insurance company.
- If an agent is dealing with multiple insurance companies, they will give you options to choose from, which saves you time in comparing different products from different companies yourself.
- Being in the industry, the agent will have insider information about which companies are great/poor at paying claims which comes in handy as you do your due diligence about the company.
- An agent may be able to negotiate payment terms, depending on the nature of insurance.
- When it comes to raising claims, the agent acts on your behalf, insofar as coordinating with the insurance company is concerned.
One thing to note though is that the agent represents the insurance company, and not you as the client. Therefore, you should not delegate all the due diligence to them.
Featured image credit: Flickr
