Compare insurance policy wordings side by side

What to compare (beyond the premium)

A cheaper premium is meaningless if the cover is narrower. A defensible comparison lines up:

1. 01Sums insured and cover limits, section by section.
2. 02Exclusions and the wording that narrows cover.
3. 03Excess / deductible structure, including voluntary vs compulsory.
4. 04Waiting periods, endorsements and special conditions.
5. 05Extensions included as standard vs optional.

The comparison is part of the section 8 analysis, not a step after it

Section 8(1) of the General Code requires you to take reasonable steps to seek the information you need about the client, to conduct an analysis of it, and to identify a product appropriate to the client’s needs and circumstances. That last step is a comparison whether or not you write it down as one: "appropriate" is a claim about this product relative to the alternatives, and you cannot make it from a premium figure. So the comparison is the analysis, and the Record of Advice is where its conclusion gets recorded.

Where two short-term wordings actually differ

Schedules look alike. The differences that decide a claim are in the wording, and in practice they cluster in the same six places:

1. 01The average condition — whether it applies, and at what percentage. Two policies with identical sums insured pay very differently on a partial loss when one averages and the other does not.
2. 02Excess structure — a lower premium is often a higher or differently-structured excess, and a per-claim excess is not the same as a per-event one.
3. 03Extensions — accidental damage, theft without forcible entry, power surge, goods in transit. Standard on one wording, an optional buy-back on another.
4. 04Claims conditions — notification periods, the security or maintenance warranties that void cover, and what counts as reasonable precautions.
5. 05Territorial limits and the definition of the insured premises.
6. 06For commercial risks, the business interruption indemnity period and how gross profit is defined.

On a replacement, the comparison is named in the Code

Where the new policy replaces an existing one, section 9(1)(d) requires the Record of Advice to record the comparison you did and the reasons the replacement is to the client’s benefit. That is a higher bar than an ordinary recommendation: it is not enough to show the new product is suitable, you have to show the client is better off leaving the old one. A side-by-side of cover — not price — is the only form of evidence that answers it.

What the comparison has to end with

A table is not advice. The comparison has to resolve into a motivation the client can read and the Ombud can follow: which policy you recommended, which differences drove that recommendation, and which differences you judged immaterial for this client. Recording the ones you set aside matters as much as the ones you relied on — it is the difference between a considered recommendation and a narrow reading of the file.

Four mistakes that survive a busy quarter

1. 01Comparing schedules instead of wordings. The schedule gives you sums insured and excesses; every exclusion that decides a claim is in the wording.
2. 02Treating equal sums insured as equal cover, without checking whether either policy averages.
3. 03"It was cheaper" as the motivation. Price is a fact about the quote, not a suitability reason.
4. 04Comparing at inception and never again. A renewal moved to another insurer is a replacement under the 2020 Code definitions, and it carries the section 9(1)(d) comparison with it.

Keeping the comparison with the advice

Section 3(2) of the General Code of Conduct requires advice records to be kept for five years, and the comparison is part of the advice record rather than a working note. Whatever produced it — a spreadsheet, a broker platform, an AI-generated summary — the version you relied on is the version that needs to be retrievable, in a form that reproduces what you saw on the day.

Why this matters for FAIS advice

When you recommend one policy over another, the Record of Advice has to explain why — and "it was cheaper" is not a suitability motivation. A structured comparison of cover, not price, is the evidence behind a defensible recommendation.

Frequently asked questions

Can AI compare two insurance policy wordings accurately?

Broker AI extracts the structured terms — limits, exclusions, excesses, waiting periods — and presents them side by side for you to verify. It does the reading and structuring; you keep the professional judgement and confirm the output against the wording.

Does comparing on price alone satisfy FAIS?

No. Suitability turns on the client’s needs, so a recommendation has to be motivated on cover and fit, not price alone. A cover-level comparison is the evidence behind that motivation.

What documents do I need to run a comparison?

The policy wordings and schedules for the policies you want to compare. Broker AI reads them directly — no manual re-keying of limits and exclusions.

Do I have to compare policies on every renewal?

Not on every renewal as such — but if the renewal moves the client to another insurer, that is a replacement under the 2020 General Code definitions, and section 9(1)(d) then requires the comparison and the reasons the replacement benefits the client.

How much of the comparison belongs in the Record of Advice?

Enough that the recommendation can be followed without the underlying wordings: the differences you relied on, the ones you judged immaterial, and why the recommended policy fits this client. The full side-by-side can sit with the advice record rather than inside the ROA itself.

What is the most common comparison mistake?

Comparing schedules rather than wordings. The schedule shows sums insured and excesses and looks like the whole picture; the exclusions, warranties and claims conditions that decide a disputed claim are only in the wording.

This page is general information, not legal or compliance advice. Always verify AI output against the policy wording.

Sources

1. 01General Code of Conduct for Authorised Financial Services Providers and Representatives, Board Notice 80 of 2003 as amended to Board Notice 706 of 26 June 2020 — sections 3(2), 8 and 9 (consolidated text hosted by Masthead)
2. 02Financial Advisory and Intermediary Services Act 37 of 2002 — section 18, Maintenance of records