Guiding consumers since 2009

Managing your insurance in a tough economy

By Jessica Anne Wood

The country’s sovereign credit rating is now at junk (sub-investment) status with two ratings agencies, Standard & Poor’s (S&P) and Fitch.

Bertus Visser, chief executive of distribution at PSG Insure, notes that many analysts are warning the need to tighten our belts and prepare for tougher economic times. He advises that looking at your insurance, and ways to save around the house is a good place to start.

Keeping you and your money safe

There are a number of things you can do around the house to help save money. One of these is to avoid claiming on your insurance. This helps to keep down your premiums, and Visser notes that if you have a no claims bonus facility on your insurance policy, you also benefit from a pay out after a set period of no claims.

There are other ways to save too. Visser says: “Great tips to try at home include turning off electrical points and appliances when they are not in use. This will save on electricity costs, which helps your pocket a little, and reduces risks of appliances or cables shorting and causing a fire, for example.

“If you have a leaking tap, or any other leaks around the house, get these repaired. You will be saving on water costs, as well as repair costs down the line, particularly if the leak is coming from the roof and impacting walls. Remember that for insurance purposes, your roof has to be maintained so that you will be covered. It is worthwhile to have leaks detected and sorted as soon as possible.”

Halt any spending plans

Any plans that will include spending large sums of money should be put on hold, such as buying a new car. Whether you are looking for a new car, or buying second hand, these can incur high repayment costs, and should be insured upon purchase.

In addition, newer model cars often invite higher insurance premiums. Visser suggests maintaining your current vehicle to keep in line with your present insurance cover. You can also help by “making sure you have regular services (usually once a year, or every 10-15 000kms, or depending on your vehicle’s specifics) and [ensuring] your tyres have the right tread on them (no less than 1.6mm legally).”

“You can also reduce your sum insured value on your existing vehicle, which may also reduce your premium,” adds Visser.

Be import-savvy

Since the cabinet reshuffle, and the subsequent two ratings downgrades to junk status, the Rand has weakened. Fluctuations in the exchange rate have an impact on any imported goods that you may own.

“Chances are that items from your television to your porcelain tiles would cost more to replace today than when you bought or installed them, and they need to be sufficiently covered by insurance. It would be worthwhile to re-evaluate your contents and increase your cover accordingly. Keep in mind that being underinsured will be the most costly of all for you, should you need to claim,” explains Visser.

If you claim and your items are underinsured, Visser reveals that your claim may be repudiated entirely, or only a portion will be paid out. For example, if your contents value is closer to R500, 000 and you have it insured for only R250, 000, your insurer may only pay out 50% of R250,000, which could leave you having to fork out the extra money to replace the item.

If you are unsure about any of your current cover, chat to your insurance provider or broker.

 Handy tip: You can apply for a range of insurance products via Justmoney.

Recent Articles

Featured Lock down your finances

There are quite a few things that may influence your personal finances. These include an economic recession, losing your job, not receiving your full salary, your company closing, or even a state of disaster in your country, such as the current lockdown due to the Covid 19-outbreak. 

Ensure your family doesn’t feel the impact of your retrenchment

Retrenchment doesn’t only change the way you view yourself; it also alters the relationship between you and your family. Things can go from good to bad within a short space of time. But you can do something to prevent your family from feeling the impact of retrenchment.

Someone got injured on my property – now what?

Life is unpredictable and no matter how careful we are, accidents happen. But what if someone has an accident while visiting your house? Your guest could fall off the stairs, slip on the floor or get bitten by your dog. 

Are you ready for a house upgrade?

You moved into your home knowing one day you would need to make some changes to turn it into your dream home - add a new bedroom, a second bathroom, build a double storey or even move out.


Free large chips at KFC

Price: R119.80
When: Daily
Where: Online

Big family feast for R299 at Panarottis

Price: R299
When: Thursdays
Where: Nationwide

Spur Burger Combo for R249

Price: R249
When: Daily
Where: Nationwide

Latest Guide

Guide to debt rehabilitation solutions