Less than 35% of South African vehicles are insured and inquiries to cancel coverage are increasing
Experts recommend the community to reduce insurance costs instead of eliminating them. It is a better idea, they propose, to continue to have a coverage which may be cheaper and from a different insurance promoter, than not having one at all.
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As human beings we have always had the need to feel safe, secure, protected and insurance policies provide us with that. Then, why is it that a number of car owners feel policies have become a luxury, and the amount of insured cars is surprisingly low?
We should talk about Covid-19 to find one of the reasons why.
The known global pandemic has led national governments around the world to take measures to try to slow down its impact on their economies. Among other important measures, many countries resorted to national lockdown as a way to avoid health systems to collapse facing the pandemic. Despite the fact that staying at home has proved to provide relief when it comes to health care, this response has impacted greatly on nation’s economies.
Moreover, as if in chain reaction, it has impacted greatly on citizens’ individual household economies and budgets. The South African government took local measures to avoid further losses in revenues. However, their measures have not stopped a rise in unemployment.
A recent report on South Africa’s economy for the second quarter of the year indicates that the amount of employed people “decreased by 2.2 million to 14.1 million compared to the first quarter of 2020”. Businesses all around the country are shutting down temporarily or permanently. If there were hardships to be sorted out at the beginning of this year, those have been aggravated by the lockdown. All throughout the country South Africans have had to take important decisions as regards their spending and consuming habits.
With the outbreak of coronavirus, the amount of money people spend on everyday-basic commodities has plunged, consumer spending has dropped.
Among the expenses which have been reduced we find car and house insurances. It may sound logic to think that it is a not-so-necessary investment, but, is that right?
Many people believe that it is not worth to be paying an insurance policy for their cars since they are not travelling as much as before being under quarantine. Many workers, those lucky enough to have kept their jobs, now carry on with their duties at home and the regulations taken during lockdown mean that citizens have also less places where to go to. This, in turn, means that the risk of being involved in a car accident has been reduced.
Nevertheless, does this mean that all car-related risks have been eliminated, or could your car be stolen, for instance?
Experts who have noticed this tendency to cut down expenditures by cancelling insurance coverage have warned the population about the bad consequences this may have. As said before, other issues may present like robbery or fire. This is why, professionals whose jobs are related to this matter recommend the community to reduce insurance costs instead of eliminating them.
It is a better idea, they propose, to continue to have a coverage which may be cheaper and from a different insurance promoter, than not having one at all. That would pose a great risk for car owners. The costs that a person may have to incur if the need emerged, would be much greater and straight from their pockets. It would be a good idea to pose the following question to ourselves before making the decision of cutting insurance policies completely: why did I get the coverage on the first place?
We cannot deny that the country’s economic, social and health situation has largely changed since the pandemic hit the territory, but there are some basic necessities which remain, and whose importance should not be questioned.
Thinking about the reasons that led you to acquire a policy may make you think twice, those variables are still in place.