Households in South Africa seem to have no reprieve as they continue to face hard-hitting increases that impact their cost of living, including interest rates, electricity tariffs and rocketing food and fuel prices.
Earlier this month, South African motorists were hit hard at the petrol pumps once again by a significant fuel price increase of R1.21 cents per litre for both grades of fuel, 95 and 93 ULP and LRP.
With these increases and the rise in the cost of living in almost every other area of life, many homeowners may be concerned about their finances.
Given this impact, households may be looking for ways to cut down on expenditure to meet their monthly payment commitments.
One area you might be tempted to cut is home and car insurance but Dr Hardy Ncube from Standard Bank Insurance warns consumers to think twice before cancelling their insurance coverage as this may have far-reaching consequences and could lead to huge expenses in the long run.
Instead, he advises that people look at smarter, less risky ways to manage their expenses.
According to Ncube, Standard Bank Insurance understands that South Africans are battling severe financial pressure.
"We are doing everything we can to assist our homeowner clients, including creating awareness around some of the options they have at their disposal, but may not yet be aware of, that could help make their insurance commitments more manageable,” he adds.
Making insurance more affordable
Dr Ncube says before making any drastic changes, one should consider reaching out to an insurance broker or their insurance company directly to see how they can assist to streamline their insurance costs.
“One way to do this is by combining various types of insurance under one policy. This simplifies your finance administration, and it could also save you money,” he says.
“Additionally, make sure your home contents policy accurately reflects your current possessions and their value. Many people pay for coverage they don't need simply because they've not updated their policy.”
Ncube advises clients to reach out to their insurers to conduct a policy review, to understand exactly what their current policy covers.
"It may have been the case that the policyholder's circumstances at the inception date of the policy have changed. It might be that you've downsized or sold off some valuable possessions or physical assets that were covered by your home contents insurance. If those items no longer need to be accounted for, you might find that your premiums become more affordable. It's important to try and personalise your cover as much as possible so that it accurately reflects your existing circumstances."
Dr Ncube adds that if a client’s policy is reaching its anniversary or renewal date, and they are worried about whether they will be able to afford the annual premium increase, they can contact their insurer or broker (at least two months prior to renewal) to conduct a review and to negotiate a premium that they can afford.
Finally, avoid duplicating coverage. Remember, the goal is not to reduce coverage to the point of being underinsured but to ensure your insurance policy fits your needs and lifestyle.
Cutting daily expenses
Reviewing your lifestyle and cutting unnecessary expenses is another effective way to manage your budget.
For instance, if you're able to work from home, consider doing so to save on fuel and maintenance costs. This also has the added benefit of potentially reducing car insurance premiums due to fewer kilometres on the road and a lower risk of accidents.
At home, you can also look to cut costs by lowering your electricity consumption through using efficient energy alternatives.
Reach out for support
Dr Ncube further said, "At Standard Bank Insurance, we understand that these are challenging times, but we are committed to helping our clients navigate them and help them protect what matters most to them. We are always here to listen, support, and work with you to find a solution that eases your financial burden without compromising your long-term financial stability. After assessing your personal circumstances, we can work with you to find a solution that can help ease your financial burden”
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