A guide to short term insurance in South Africa

August 21, 2019September 26, 2019 jonckie

Short term insurance is a nerdy term for all types of insurance policies other than life insurance. It’s called ‘short term’ because your insurance needs for your possessions tends to change and you only take it for a set period of time, whereas life insurance is generally for the duration of your life.

The world of short term insurance involves quite a few products and it can be quite complicated to understand what’s on offer and what’s covered. That’s why we’ve taken it upon ourselves to explain it all, including a brief look at each product.

Insuring your house

There are generally 3 types of insurance related to your home. The first is cover for the actual house, the second is for what’s in your house, and the third is for the things that live in your house but mostly go out and about with you.

Here’s a quick look at each household insurance product.

Buildings insurance

Buildings insurance covers the physical structure of your home so that if a fire breaks out or a falling tree crashes into your living room, you’re covered for the repairs needed to get your house back in 1 piece again. Some insurers will also include cover the theft of your pool equipment and replace your geysers if they explode.

Home contents insurance

All the stuff that’s in your house needs to insured by a different policy to buildings insurance, which is called home contents insurance. This product will cover things like clothes, books, DVDs, furniture, TVs, appliances, desktop computers, and the like.

Portable possessions insurance

You might be thinking that home contents covers everything that you put in your house all the time, but actually there are some items that you take out with you so regularly that they need to be covered with a different policy. Items like laptops, cellphones, designer shades, etc. are considered ‘portable possessions’, even if you sometimes leave these things at home. These items need to be insured with a portable possessions insurance policy.

Something important to note about portable possessions insurance is that, generally speaking, super expensive items need to be specified individually on your policy. We’re talking about items that are over a set amount (typically over R30,000) but you’ll need to confirm this with your insurer.

Insuring your transport

Right, so car insurance might seem simple… But there are a few options here that you need to know about. For instance, there are 3 types of car insurance, as well as cover for your trailer, your caravan, your motorbike, and a few extras that are related to this area of insurance.

Car insurance

Typically, there are 3 types of car insurance. There’s comprehensive, which covers accidents, theft, hail damage, and damage that you cause to your own car (think about scrapes against the parking lot poles). And then there are 2 cheaper options. There’s third party, fire and theft which covers theft of your car, damage to your car by fire, and damage to the person that you get into an accident with. Lastly, there’s third party only, which covers damage to the other person involved in the incident with your car… And nothing else.

There are loads of insurance companies in South Africa, each with their own offering, so make sure to get a lot of quotes before you make up your mind about who’s the best for you. For instance, you might prefer the insurer who offers super cheap car insurance premiums that decrease monthly in line with the depreciating value of your car.

Caravan insurance

This type of cover’s specifically for your ‘house-on-wheels’. The kind that’s towed behind your car and used for fun activities, not for business or transport. A good thing to note is that most insurance companies don’t cover the contents unless you add it to your policy and pay a separate fee.

Trailer insurance

Trailers make life a lot easier when you’re going on holiday and lugging a whole lot of extra stuff with you, but it also increases your risk on the road. That’s why trailer insurance is a thing. And just like with caravan insurance, the goodies inside your trailer aren’t usually automatically covered, so you’ll need to chat to your insurer about adding trailer contents to your policy.

Motorbike insurance

Bikes are super vulnerable on the road and have their own set of risks, which is why there’s a separate short term insurance policy for motorbikes. While some companies offer just comprehensive cover for bikes, King Price is 1 insurer who’s developed 4 options. You can choose from their comprehensive cover, their third party and theft cover, third party only cover, and theft only cover.

What about the extras?

The insurance industry is constantly looking for ways to help people cover the risk that’s unique to them, which is why you’ll find a lot of different products in the short term insurance industry. We can’t go through every single type out there, but we can list a few cool options.

Credit shortfall: If your financed car’s written-off, stolen or hi-jacked, then credit shortfall covers any amount you still owe.
Scratch and dent insurance: Covers the cost of repairing minor scratches and dents on your car’s exterior without paying a huge excess every time.
Car warranty: Cover for car parts that need to be repaired or replaced after they’ve failed unexpectedly.
Personal accident: Pays out a lump sum if you, or members of your family, are permanently disabled after an accident and in the unfortunate event of your, or their, accidental death.
R1 insurance: You can add R1 insurance for a few expensive portable possessions to your comprehensive car cover with this policy, including your Apple watch, bicycle, and golf clubs.

If you’re still unsure about what policy you need for your stuff… Then call a reputable insurance company like King Price on 0860 50 50 50 and they’ll help you make the right decision.