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SA's No 1 Insurance Blog

Can you believe it…At the time of preparing this article it was 25 September. In exactly two month’s time from now, you’ll “ten to one” be sitting around a table enjoying Christmas lunch with friends and family, and not be thinking at all about car and home insurance!

This got me thinking about something which is important to insurance companies… Anti-Selection!

So what then is anti-selection?

Let’s consider this question in light of Christmas which is just around the corner.

Ever heard the story about the family which goes on holiday to Durban, only to discover upon their return, that their home has been ransacked?
Aren’t you ever worried that this could also happen to you?
If that’s a big yes, then imagine how this must give insurers sleepless nights!

In fact, it is for this very reason that insurers refuse to issue brand new car and home insurance policies during the month of December. Yes, they may allow you to increase your existing car and home insurance coverage (and in fact companies like Santam do this automatically, which is why you should consider insuring with them!), but they won’t even consider a new insurance proposal where the person involved has never had insurance cover before.

Consider this…the person wanting insurance only has to pay one month’s premium (let’s assume R500), and in return has their risk (let’s assume R500, 000) 100% covered.
The insurance company, on the other hand, receives one month’s premium, in return for all that risk.
Doesn’t seem like worthwhile odds, does it?

So now that you know what anti-selection means – don’t wait until Christmas to take out the car and home insurance cover.

InsuranceFundi has partnered with some of SA’s most reputable insurance and investment companies. We believe that everyone should have access to a wide range of comprehensive and affordable solutions. Pick the product you are interested in below, and expect a call-back from our partners.

Until next time.

The InsuranceFundi Team


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