Peter Nkhuna, Senior Assistant Ombudsman
It’s time to think smart about our finances, especially when it comes to budgeting. Let’s break down some easy-to-understand tips for managing your money wisely, focusing on insurance in South Africa.
Keep Your Insurance Going
Money gets tight, we know. However, cancelling your insurance might not be such a smart move. Apart from exposing yourself to losses you may not be able to carry, this move could result in punitively high premiums later. Breaks in insurance cover are considered undesirable.
Do You Really Need The Comprehensive Cover?
Some cover is better than none. It might be better to downgrade your cover than cancel altogether. You could insure your car for Third-Party Fire and Theft or for Theft Only options. Modern insurance is more flexible and you could possibly design your own cover based on the risks you face. For example, some insurers allow you to remove or add hail cover or other options.
Basic Cover for Older Cars is Smart
If you’ve got an older car there are also options to consider for basic insurance coverage. You could select a particular sum to be paid out when you suffer a loss and then use the payout to conduct repairs on your own.
Shop Around for Better Deals: Don’t Settle Too Quickly
The best times to see what other companies are offering are the beginning of the year or when your insurance company talks about increasing premiums. Take your time comparing quotes, and ensure you get the best deal that suits your needs.
Explore Alternatives for the Excess and Premiums, Based on Affordability
The excess is the bit you pay when you claim. If you’re up for paying more when you claim, your monthly payments might go down. Find that sweet spot between what you can pay when you claim and what you can manage each month.
TIP: Your Choice of the Excess Could Make or Break
Different insurance companies have different rules about the excess. Some charge a fixed basic excess; others use a percentage of the claim or insured value; yet others use multiple excess structures. Pay attention to the detail, especially if extra excesses apply for specific situations. The implications could be significant.
Think Twice Before Claiming for Small Losses: Retain Your No-Claim Bonus
Did you know that your insurance premiums might increase if you claim too often? And if you’ve got a no-claims bonus, making a claim could make it disappear. Before you claim for small stuff, check if paying for the repairs yourself could save you money in the long run. Being declared a multi-claimant could prove expensive and render you uninsurable.
Safeguard Your Belongings
Proactively keep your property safe, and in good condition. Just because you are insured does not mean you should be reckless with it. Your insurance company might even reward you with lower premiums for your troubles if you tell them about how you do this.
ENDS
