Taking Control of Your Insurance: A Consumer’s Guide

  • Save

In South Africa, the world of insurance has traditionally been shrouded in complexity, leaving many consumers without adequate coverage. The process of purchasing insurance has been far from straightforward, often requiring individuals to wait for a face-to-face meeting with an insurance agent. This method of selling insurance has discouraged active participation from the public, resulting in a significant portion of the population remaining uninsured.

However, a new dawn is breaking, thanks to the emergence of insurtech companies like ours. These innovative platforms are revolutionising the way South Africans buy insurance, making it more accessible, transparent, and consumer-friendly.

The Challenge of Traditional Insurance Purchasing in South Africa, much like the rest of the world, insurance has long been perceived as a “grudge purchase.” Unlike other consumer behaviours where individuals actively see the instant benefit of their purchase, insurance often feels like an unwelcome necessity, a financial safety net that they hope they’ll never need.

This passive approach to insurance can lead to a lack of appreciation for its value until a crisis strikes. The complexity of insurance further exacerbates the problem, with many South Africans struggling to understand the intricacies of policies. This lack of understanding often leads them to surrender responsibility to third-party agents without understanding the details of what they are doing.

This passivity can have dire consequences. Individuals who do not fully comprehend their insurance policies may find themselves in a frustrating predicament when they need to make a claim. They may discover that they lack the appropriate coverage, are burdened with a high excess they didn’t understand, have been overpaying for years, or are dealing with an insurer that is difficult to work with during the claims process.

The good news is that insurtech companies are stepping up to address these challenges head-on. These platforms are making insurance accessible to anyone with an internet connection, eliminating the need for in-person appointments. They are also simplifying insurance by providing easy-to-understand policy information, helping consumers determine what coverage they have, and facilitating comparisons of different products and insurers with transparency.

One of the pitfalls that consumers often fall into is focusing solely on finding the cheapest insurance. Unlike products such as cars or clothing, individuals may not fully understand the implications of opting for the lowest premium in the insurance world. What they may not realise is that choosing the cheapest insurance could compromise the quality of the insurer or the coverage they receive when it matters most.

Furthermore, in the past, consumers had limited choices, often having to accept one-size-fits-all insurance products that didn’t necessarily meet their specific needs. Insuretechs are changing this by allowing individuals to tailor insurance products to their unique requirements. This flexibility ensures that they don’t pay for extras they don’t need, making insurance more cost-effective.

The High Excess Conundrum

Taking a high excess to lower premiums is a common tactic among cost-conscious consumers. However, the implications of this decision can be severe. For example, let’s say you choose a higher excess, like R15 000 to reduce your premium, but when a claim arises, you find yourself unable to afford the higher excess out of pocket, or the majority of your claims are under that value, and therefore you cannot even claim. This situation can lead to financial strain and heightened stress during an already challenging time.

To avoid these frustrations, South African consumers should actively manage their insurance choices. This includes understanding the intricacies of their policies, making informed decisions, and comparing options. While working with a broker has traditionally been the route to personalised advice and comparisons, insurtech companies like ours now offer the best of both worlds. They provide independence and control while still offering digital broker support, guiding you through the process to ensure you make informed choices.

Getting multiple insurance quotes is vital to ensuring you have the right product at the right price. Traditionally, this would often be a painful process, requiring hours on the phone and piles of paperwork, often resulting in consumers settling for the first product they get. In the digital age, obtaining multiple quotes is easier than ever, allowing consumers to make well-informed decisions without being bound by traditional working hours.

South Africans now have the opportunity to take control of their insurance decisions. The rise of insurtech companies is making it possible for consumers to purchase insurance on their terms, understand what they are buying, and get the best value for their money. By actively participating in their insurance choices, individuals can avoid unpleasant surprises and secure the financial protection they need.

In a world where waiting for someone to sell you insurance is a thing of the past, it’s time for South Africans to embrace this change and protect their financial future with confidence. By actively managing their insurance, understanding the implications of their choices, and seeking multiple quotes, consumers can finally gain the upper hand in the world of insurance, ensuring they have the right coverage when they need it most. Join the future of insurance and be empowered to take control.

In the current age of personalization and abundant choices, the power now rests squarely in the hands of consumers. Pre-packaged insurance offerings, which may contain unnecessary elements, are no longer the only option. Every individual can tailor their insurance to meet their specific needs, customising coverage, provider, benefits, and additional features. For instance, a married couple without dependents can limit the number of authorised drivers on their vehicle, yielding substantial savings on their car insurance.

When selecting insurance coverage, the ability to make changes or file claims at any time and adapt the plan to one’s needs is pivotal. Emerging technologies such as Artificial Intelligence, machine learning, and data analysis enable personalization, aligning insurance solutions with individual lifestyles and evolving circumstances.

Unfortunately, many consumers only fully comprehend the intricacies of an insurance policy when they need to file a claim, often after experiencing damage or loss. Insurance policies can be excessively lengthy and laden with technical jargon, making them challenging to decipher. Govender asserts that consumers can empower themselves by gaining a better grasp of policy structures and their underlying rationale. This knowledge equips them to protect their families and assets effectively.

Consumers should not merely accept insurance offerings at face value. They should ask questions to comprehend the extent of coverage and tailor premiums accordingly. The power to choose the right policy ultimately lies in their hands.

In conclusion, consumers need not feel helpless in the realm of insurance. With financial responsibility, a balanced approach to excess and premiums, and a commitment to understanding policies, individuals can take command of their insurance decisions and secure the coverage that best suits their needs.

Mishaya Chettiar – Co-Founder and Executive Head of Everything.Insure

Image by Drazen Zigic on Freepik