Guiding consumers since 2009

Clock ticking on compulsory motor insurance

By Staff Writer

Ian Kirk CEO of Santam, the country’s biggest short term insurer, admitted today that he was engaging with Treasury over introducing a ‘no frills’ motor insurance product to target the 65% of drivers that are uninsured in South Africa. Kirk, who is set to talk to Treasury again at the end of this month on the issue, said government could put compulsory motor insurance laws back in place in two to three years time if the insurance industry introduced the right products. 


“There’s no particular deadline in place [on when the industry would have to deliver such product], but we are engaging with Treasury on a company level and through the South African Insurance Association. Introducing such a product in two to three years time is feasible,” said Kirk.


Kirk added that the industry would have to tackle affordability before a ‘no frills’ compulsory product is introduced. “We can’t introduce a product that will cost around R500-R600 per month in premiums. Premiums would have to be around R250-R300,” he said.


Kirk said that the product would offer more benefits than fire and theft cover but will not be as sophisticated as current comprehensive products. He explained that with premiums at that level a slimmed down version of the comprehensive product offerings available today would have to be offered to consumers. “We will have to slim down the benefits. Customers, for instance, may not be able to fix the car at a fancy repair shop and may only be able to get their cars repaired at certain times of the day.”


When asked if insured customers would trade down to the basic product, Kirk said he was certain consumers would choose the right product for them. “Consumers will choose the product they need. They will know the difference between the no frills product and the comprehensive product.”
 
 

Recent Articles

Featured Debt counselling – the two sides of the coin

Being overindebted doesn’t just put a strain on your personal finances; it also puts a strain on your state of mind. The best solution is to start the process of debt counselling so that you can escape the debt cycle. But what are the ups and downs of joining this debt relief programme?

Travel ban – how to claim for the loss incurred

As with the recent Covid-19 pandemic, governments sometimes issue travel bans to prevent people from travelling to other countries. This becomes even more complicated if you’ve already planned and paid for your trip. Your flights will be cancelled, and you may lose money from cancelled accommodation arrangements. How do you claim for the financial losses incurred due to a travel ban?

How to finance and insure a second-hand vehicle

Buying a second-hand vehicle may suit your budget better than acquiring a new one. But what impact does an older model have on vehicle finance and car insurance? We reached out to specialists in the field to explain what the financial implications are of pursuing a second-hand vehicle.

Reading your loan agreement: look out for this

Many people don’t read their loan agreements. They just sign on the dotted line without realising that they could be signing their lives away. But it’s important to review your loan agreement before and after taking your loan to avoid future setbacks.

 

Deals

Udemy online course for R180

Price: R180
When: Until 27 March 2020
Where: Online

Educate your kids for free with Skills Share

Price: Free
When: Daily
Where: Online

Take advantage of payment holidays from Standard Bank and Nedbank

Price: Free
When: From 1 April to 30 June 2020
Where: Nationwide