CompareGuru | Compare Insurance Quotes OnlineCompare Insurance, Car Insurance Quotes, Funeral Cover Quotes, Life Insurance Quotes, MotorVAPS Quotes, Budget Insurance, Insurance Quotes, CompareGuru, South Africa.
Car and Household
Commercial Insurance
Funeral
Medical
Pet Insurance
Wills
Car Insurance
Cover your vehicle
More Information
Get Quote
Home Insurance
Cover your home and everything in it
More Information
Get Quote
Commercial Vehicle Insurance
Protect vehicles and drivers used in the day-to-day operation of your business against risks like financial loss, damage or personal injury.
More Information
Get Quote
Commercial Insurance
Provide cover against common risks and disruptions to business operations, such as theft, damage to property, employee / client injury and much more.
More Information
Get Quote
Directors and Officers Liability
Safeguard your business and key players from financial loss with the right policy.
More Information
Get Quote
Errors and Omissions Liability
Covers your business and employees against claims of negligence, poor workmanship, and more.
More Information
Get Quote
Funeral
Protect your family financially and cover funeral expenses
More Information
Get Quote
Gap Cover
Cover yourself for unexpected medical costs
More Information
Get Quote
Health Insurance
Protect your family with affordable basic medical cover
More Information
Get Quote
Pet Insurance
Protect the whole family including your fur babies.
More Information
Get Quote
Apply For A Will
Get a Will drafted and cover the costs of dying.
More Information
Start Application
Menu
Home
About Us
Life Insurance Quote
Car Insurance Quote
Funeral Insurance Quote
Gap Cover Quote
Health Insurance Quote
Pet Insurance Quote
Extended Warranty Quote
Pre-Owned Warranty Quote
Scratch and Dent Quote
Tyre And Rim Quote
Apply For a Will
News Room
Meet The Team
Careers
Providers
Insurance
Car Insurance
Building Insurance
Household Contents Insurance
Life Insurance
Disability Insurance
Serious Illness Insurance
All Risk Insurance
Funeral Insurance
Gap Cover
Health Insurance
MotorVAPS Cover
Commercial Insurance
Commercial Vehicle Insurance
Directors and Officers Liability Insurance
Errors and Omissions Liability Insurance
Money
Support
Contact Us
Terms of Service
Privacy Policy
Disclosures
Client Letter
POPI Act
CIM Policy
Complaint Escalation
TCF Form

News Room

What Makes Up Your Insurance Premium?

Do you know what exactly you are paying for with insurance? We uncover just what makes up that monthly premium!
Insurance is seen as a grudge payment by almost every person who forks out a monthly premium. Whether it be life, car or home insurance, an amount gets deducted every month, and, for the majority of us, we simply do not know what gets included in the insurance premium. When signing for insurance, we are all aware that we agree to a certain amount that is deducted off monthly. We also agree to a certain amount of excess. And, even though most of us know why we need to pay an excess, should we claim, we have little to no idea what makes up the figure. We thought we would look at what makes up a monthly premium and how your monthly contribution is divided.

Broker Fees And Commission

According to the Financial Intermediaries Association of South Africa (FAIS), brokers are legally obligated to disclose their commission, as well as their fee structure. Should you be signing for cover with a broker, you have the legal right to be fully aware of what the broker will be pocketing in the transaction.
The Short Term Insurance Act states that “An independent intermediary shall not charge, in addition to any remuneration contemplated in Section 48, any fee which is payable by a policyholder, unless the amount thereof is disclosed expressly and separately to the policyholder by the intermediary.”
The Act goes on to state the following. The fee must:
  1. Be specifically agreed to by the client in writing;
  2. Be disclosed;
  3. Not be a duplication for which remuneration has already been paid (commission or binder fee);
  4. Be reasonable for the service/s provided; a
  5. There should be no barrier to exit from this fee on the part of the client.
So, just how much is a broker allowed to charge? According to the Act, a broker's commission can be charged at 12.5% for motor business and 20% for other business. A broker is also allowed to charge a flat-out broker fee, which also needs to be legally disclosed to the client. Should you be going directly to an insurer, the lines become somewhat fuzzy on what you are paying for. Due to the fact that there are no brokers involved in the process, there are no broker fees and commission. The insurer does, however, have to pay the call centre agents that have sold you the insurance.

NEW to CompareGuru? CLICK BELOW To Compare Car Insurance In 60 Seconds

Other Costs In Premiums

A premium is also made up of several other costs.

Base Premium

The base premium is calculated on your risk profile, which is established by your insurer or the broker. A base premium can increase or decrease based on your lifestyle and financial position. In most cases, a broker will be able to establish a more accurate estimate of your base premium than a direct insurer. This is due to the fact that a broker can work out a more accurate risk profile for you.

Taxes And Levies

The only thing in life that is guaranteed is death and taxes. All insurance claims include a taxable amount, however, according to the Value Added Tax Act No. 89 of 1991, long term insurance is exempt from tax.   Can you claim back from your tax? Read more here!