Household Insurance Cuts Till Ongoing

April 13 - Insurance experts are warning South Africans not to cut back on their insurance cover, even though economic conditions may still be tough.

According to an online survey commissioned by mortgage originator, ooba, over 20% of all homeowners did not have household insurance.

In addition, 14% of respondents stated that they need to cut back on their cover in order to manage financially on a month to month basis.

"While it is understandable that people are looking for ways to reduce monthly expenditure, given the recession South Africa has experienced, this in one of the last areas where people should be looking to cut corners," said Craig Deats of ooba.

Another statistic, this one slightly more encouraging, showed that 19% of respondents indicated that they had consulted with an advisor to see whether there was any way they could reduce monthly premiums without eliminating their benefits.

Another group, Absa, also confirmed that many homeowners had allowed their insurance policies to lapse this year.

"Our advice to consumers in these financially difficult times is to ensure that their largest and most valuable asses, such as their homes or vehicles, are secured by insuring them accordingly," said Patrick Wadula, speaking for Absa.

Ooba's Deats predicted that the government's recent interest rate cuts should provide some relief to homeowners and this may be a good time to get South Africans to review their finances to see whether they could take out necessary insurance cover.

"Insurance is one of those payments that people tend to make begrudgingly, but with such a high rate of household burglaries in South Africa it is an essential purchase," he said.