Risk management is at the heart of personal and business financial planning, and what better way to manage your risks than with insurance products. Purchasing any insurance product is not as easy as we would want. 

Keep in mind that any policy you have with an insurer is a contract. You have to leaf through every detail to ensure you know what you are getting yourself into. A single missed detail could cost you your claim after months or years of paying your premiums religiously. 

Which makes choosing the right insurance company for your policies all so crucial. The last thing you want is to spend days or months following a claim or dealing with dodgy insurance employees when you are in desperate need.

Below are a few tips to consider when choosing the right insurance company:

1. Insurer vs an Independent Agent 

You can buy insurance products directly from the company. It’s the best option if you understand the insurance world, prefer handling your insurance matters, and know what cover you need. 

Alternatively, you can use an independent agent. They are the best option if you understand little about insurance or would like to compare products from different insurers and have an independent insurance advisor. 

While the agent helps you choose the right insurer, only the insurance company will do the below:

• Determine your premiums
• Sends you a copy of your policy 
• Handles your payments 
• Makes any necessary payments to your policy 
• Pays your claims 

The problem is, you need to take extra caution even when you are using an independent agent to learn and understand what you are getting yourself into. So many Kenyans have had the insurer not honour their claims because the agents were not forthcoming with information about the product they are purchasing. So, understand the product and, most importantly, your policy. 

Read more about Individual Retirement Plans vs. Life Insurance Policy; What You Need to Know

2. Insurer’s History & Reputation

Whether you are using an independent agent or not, you owe yourself to do due diligence on the insurance company you want to use (I almost learned the hard way). Thanks to the internet, you can run a search on search engines and get details about: 

• How long has the company been in existence 
• The company’s values, mission & vision
• The leadership of the company 
• Types of insurance products 
• Regulation – insurance companies in Kenya are regulated by IRA (Insurance Regulatory Authority) 

On reputation, what are previous stakeholders, especially customers, saying about the company? Consider the insurer’s reputation as a reflection of its sales force quality, handling of claims, management, customer management, and transparency regarding its products. 

3. Financial Stability 

You do not want to buy policies with an insurer whose finances are questionable. There is a high likelihood that the company doesn’t have the financial capability to meet its claims. You will be losing money because after paying your premiums consistently, you will not get the coverage when you need it. 

Go through the financial reports of the company. Check the ratings from independent rating agencies. Yes, there are years when companies make losses. However, if the insurer has been posting consistent losses where competitors have not, and the industry or the market are not expecting a downturn, then there is a problem in the company. 

4. Type of Insurance 

Even if the insurer has a wide array of products, does it have one that matches your industry and company or personal needs? Most insurance companies offer essential covers, like auto insurance, general liability, workers compensation, and home insurance, just to name a few. 

However, there are instances when you might need a specialised cover, like an errors & omissions policy. For these, consider using an insurance company that has experience handling such specialised policies. 

5. Cost 

These vary between companies, but just because company A offers you cheaper options doesn’t mean it is the best option for you. Premium depends on many factors, the scope of the cover, limits, company rates or any discounts offered. 

As you compare quotes, ensure your comparison is of “apples to apples”. One quote may be more expensive because it is broader, but does the extra coverage offered benefit you? If not, maybe the cheaper option is better for you. If yes, then you are better off with the expensive cover. 

6. Customer Service & Ease of Doing Business

I wish there was a review system for financial institutions. I have seen even the Google Reviews are not available for most of the insurance companies in Kenya. This would really come in hand for a lot of use when making decisions. 

A few have reviews on social media pages, so you might get some good insights if you pay attention. Just search that particular company on Twitter or Facebook, and you might get enough information to decide whether their customer service is reliable. 

What to look for? 

• How easy is it to get feedback from the institution? 
• Online payment methods
• Online claim reporting options 
• Presence on social media pages 

I recently changed my home policy from Sanlam because of this. Remember when I said I almost learned the hard way when talking about a company’s reputation? Well, this was it. I was using my banker as the agent, who was the most responsive of the two parties. 

The insurer’s, on the other hand, was a different story. From the beginning, their response time took days, weeks even. Most of the time, the bank’s relationship manager had to intervene for me to get a response from Sanlam. I recently searched their mentions of social media, and I am glad I never had a claim with them because if my mails can go unanswered when I am trying to add items to my policy, what happens when I have a claim?

My experience with them might not be pleasant, but maybe someone else has had excellent services from them. Still, pay attention to such complaints from customers. If they add more than enough, then there is a chance you will be on the complaining end soon enough. 

Related post: Home Insurance: Advantages and Insurers to Use Kenya

7. Handling of Claims

Speaking of claims, how does the company handle its claims? Some companies are more effective and efficient than others. You are definitely better off with an insurer who is very efficient with the process. If you are using an agent, try asking them about the process of different companies. Again, social media is an excellent reference point for experiences from previous customers.  

8. Payment Plans 

Some insurers offer payment plans where you do not have to pay the whole premium in a lump sum. That’s a great option where you need a cover but are pressed for cash. Of course, the final payment will be a bit higher than what it would cost if you paid upfront. But if that cost is negligible and you don’t mind, this will be an excellent option for you or your business. 

DISCLOSURE: THE INFORMATION PROVIDED TO MY READERS IS GENUINE AND PRECISE TO THE BEST OF MY KNOWLEDGE. THE LINKS PROVIDED IN THIS ARTICLE DO NOT BELONG TO ANY AFFILIATE PARTNERS AND I AM NOT PAID FOR THEM. THE ARTICLE OFFERS GENERAL INFORMATION AND SHOULD NOT BE USED AS A SUBSTITUTE FOR PROFESSIONAL ADVICE OR HELP THAT CATERS TO YOUR INDIVIDUAL FINANCIAL GOALS. KINDLY SEEK HELP AND ADVICE FROM YOUR FINANCIAL ADVISOR FOR PERSONALISED ADVICE AND HELP. ANY ACTION TAKEN BASED ON THIS INFORMATION IS AT YOUR OWN RESPONSIBILITY AND RISK.