The increase in the fuel price means South Africans are feeling the pinch, and Momentum Short-term Insurance Chief Commercial Officer, Etienne du Toit, cautions consumers against cutting short-term insurance from their monthly budgets.
He says difficult economic times impact consumers’ psyche in various ways. “Consumers are likely to adjust their finances to navigate difficult economic times. This can have short-term gains but the long- term impact can be felt if the decision is not based on appropriate financial advice.”
Du Toit makes a case for not cutting insurance off the monthly budget:
Safeguard your finances in the event of accidents
The South African Insurance Association reports that about 65% of the country’s road users are uninsured. This means if you do not have car insurance, you may be liable for all costs relating to accidents, such as repair costs, legal fees, towing and storage fees even if the accident was not your fault.
Cashback rewards to stretch your rand
Some insurers offer incentives that reward certain behaviours. Momentum Multiply members can benefit from safety related rewards on their short-term insurance policies. These rewards make it possible to accumulate additional cash in the client’s pocket. It is advisable to shop around and find an insurer that offers financial rewards to help you stretch your rand.
It’s more than protection for your insured valuables
Some insurers offer additional benefits such as emergency home assistance to help with burst geysers, emergency electrical repairs and locksmith services. This assists in certain emergencies at home, ensuring your emergency fund is preserved for other unforeseen expenses.
Minimise debt exposure
South Africans need to take all the necessary precautions to safeguard themselves from possible threats such as theft at home and elsewhere. Short-term insurance can help you recover from a financial loss, thus minimising the possibility of increased debt exposure. For example, if you are uninsured and lose your home contents due to theft, you may not be required to borrow money to replace lost items that you cannot live without.
“This added financial pressure on consumers requires consumers to be more careful and disciplined with their finances, and make decisions that will ensure they remain on track to achieve their financial goals. It is advisable to speak to a reputable financial adviser who can help you draft a budget to help you navigate the tough economic times,” concludes Du Toit.