South Africans Battle with Insurance Premiums

August 11 - The spiralling cost of living in South Africa has forced many consumers to take another look at their finances in a bid to cut down on expenses. One area that these consumers are having to reappraise is the cost of their insurance premiums.

A recent study by justmoney.co.za shows that one in five South Africans simply cannot afford their car insurance premiums anymore.

Consumers were asked what they would do if they were suddenly faced with higher premiums in the survey and the results were interesting and little worrying, to say the least.

A full 18% said that they would simply stop paying the insurance premiums because they could not afford them in their budget. 38% said that they would take the initiative and shop around for an insurance that offered cheaper premiums, while 31% said that they would take the easy way out and carry on paying, despite the price increase.

13% of consumers said that they would make the effort to try and renegotiate better terms of payment with their insurance companies.

The managing director of justmoney, Paul Beadle said: "It is not surprising that when money gets tight, expensive items like insurance cover gets sacrificed in the list of financial priorities. But not having adequate insurance coverage is dangerous, and could turn out to be more costly in the long run."

"Insurance is seen as a grudge purchase," explained Beadle, "something we know we need but because it seems so expensive, we try to get it as cheaply as possible without any thought as to whether it is the right cover or cost-effective policy. People need to review their insurance regularly, just as they would their investments or their home loan, so that they know they are getting the maximum value for money - and protection - from their insurer."