Stacking the odds against yourself

Insurance, especially the short-term variety (for your possessions), is something you don’t notice when nothing goes wrong.

But you’ll know about it instantly when you don’t have it and disaster comes calling.

Most people regard short-term insurance as a “grudge” purchase – and would far rather spend their money on something else.

Because this type of insurance often offers no tangible benefits, it is almost invisible and is seen by some as unnecessary.

Yet, many families and individuals have been ruined, or have been unable to replace prized personal possessions, because they could not afford to after a loss.

Because of what can only be termed “financial illiteracy”, many South Africans do not appreciate the importance of covering their houses, cars, computers, cellphones and even sporting equipment against loss.

So, people will buy cars, for example, for the maximum repayment their salary can bear, without factoring in the cost of insurance.

This leads to debt, repossession and even huge monetary catastrophe if that uninsured car is written off.

Insurance may well be a grudge purchase, but without it, a life already full of risks becomes even more of a game of chance. And you don’t want to end up a loser in that game.

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