Treat insurance as a vital part of financial planning, says SAIA

As South Africa joins the global observance of World Investor Week 2025 (6–12 October), the South African Insurance Association (SAIA) encourages consumers to broaden their understanding of financial wellness beyond budgeting and investing. Often overlooked, non-life (asset) insurance is crucial for protecting consumers from financial loss due to unforeseen risks, while promoting consumer financial resilience. As such, SAIA encourages consumers to review their information about non-life insurance products and start seeing them as protective safety nets that safeguard assets and provide consumers with peace of mind during uncertain times.

Ms. Zanele Gigaba, Transformation Manager at SAIA and also the current Chairperson for MSWSA, said: “As consumers, we should not look at insurance premium as an expense, but rather a valuable component of our financial planning and management, as it provides peace of mind and protects us from financial worries when experiencing shock due to damage and/or loss of our valuable possessions such as our motor vehicles, homes and businesses.”

Many consumers have remained sceptical about the value of non-life insurance products, especially when the consumer has not had any claim against their insurance policy and therefore sees payment of premiums as one of the easy expenses to abandon when undergoing difficult financial periods. However, this perception and practice of cancelling policies overlooks the true value of insurance, as a tool that assists in lessening financial shocks that a consumer may experience as a result of loss or damage to their properties.  Insurance, in this context functions like a financial kitty, that can help consumers maintain long-term financial stability.

Consider this, without insurance, a car accident or home burglary could leave one in a devastating financial position, including wiping out savings if one had to spend their money towards unforeseen damage or loss of property. Having an appropriate insurance cover for your needs shifts those financial losses to your insurer, preserving your wealth and enabling smoother financial recovery.

At its core, non-life insurance is about transferring financial risk. Instead of shouldering the full financial impact of an unexpected loss, a consumer can transfer this burden to an insurer at an exchange of paying premiums. These premiums are usually a fraction of the potential cost of the insured asset.

To help consumers optimise their non-life insurance product benefits, SAIA recommends the following smart money habits:

1.      Review Your Policy Regularly

Always ensure that your insurance policies provide relevant and appropriate cover for your needs by regularly (at least once a year or as and when your circumstances change) reviewing your policy cover and making the necessary updates.

Regular reviews can also assist the consumer with:

• Avoid being under- or over- insured
• Negotiate for better premiums or extra benefits
• Remove cover for belongings that have already been discarded.

2.      Shop around and compare products for the best value

Insurance products vary widely, and different insurers offer unique benefits such as negotiated excess structures, no-claim bonuses, and loyalty rewards. This process also allows the consumer to better understand the available products and identify those that best suit their needs.

3.      Read and understand your policy documents

Many clients are often unaware of what their policy contracts cover, as they may not have taken the time to read them carefully or engaged with their brokers / insurers to get assistance if there are parts that they do not understand. These engagements ensure better understanding of the terms and conditions of one’s contract, including knowing what is covered and excluded, thereby avoiding disappointment at the claims stage. 

4.      Consolidate Assets with One Insurer

Sometimes, it can be beneficial for the consumer to consider consolidating their non-life covers under a single policy with the same insurer, as some insurers offer discounts for multiple covers in the policy. This can often give the consumer a better premium negotiating advantage, while also simplifying administration processes when engaging with their insurer.

5.      Maintain and Protect Your Assets

Proactive maintenance of your insured assets may lower risk and can positively influence your premium. For example:

• Regular vehicle maintenance reduces the risk of mechanical failure and accidents.
• Home security systems may lower insurance premium costs.
• Keeping receipts and inventories simplifies the claims process.

6.      Request a Premium Review

 If your risk profile has improved or you’ve gone years without claims, ask for a premium review. Insurers reward responsible customers who manage their risks and maintain transparency.

“Consumer financial education is key to empowering consumers when engaging with the financial sector and promoting financial inclusion. Thus, SAIA remains committed to providing consumer education initiatives that seek to promote consumer understanding and confidence in engaging with the non-life insurance industry and its products and services,” concluded Mr. Themba Palagangwe, General Manager: Governance and Transformation at SAIA.