Insurance in South Africa

What is an insurance policy?

An insurance policy is a contract between an entity and the insurance company wherein the insurer provides financial aid to the insured entity to mitigate the cost shouldered by the latter due to damages or losses. In return, the policyholder pays a monthly premium to maintain the financial coverage provided by the insurer.

Get a Insurance in South Africa to secure your lifestyle.

There are 2 categories of insurance policies in South Africa: long-term and short-term.

  • Short-term

This is the type of policy you avail to protect you or your possessions from damage caused by unforeseen events like accidents, calamities, illnesses, or crimes. Vehicle and travel insurance policies are some of the examples under this category.

  • Long-term

This is insurance that protects you from life-changing events like disability, retirement, or death. Its primary purpose is to provide you with a source of income, either through lump sum or staggered payment, which you (or your family) can use if any of the above circumstances happen.

For individuals, the most popular personal insurance policies available to them are the vehicle, home, life, and health insurances. Businesses can also apply for an insurance that helps them cover the cost of property damage or loss.

How Insurance Works in South Africa

There are 3 main components you need to know that make up an insurance policy: (1) the premium, (2) the deductible, and (3) the policy coverage.

  • Premium

The premium is the price you pay to get the policy. Usually, it’s expressed as a monthly cost you have to pay to maintain the insurance coverage.

The premium cost will usually depend on personal circumstances that affect your risk profile. A higher risk profile means you have a greater chance of filing an insurance claim. If you have a history of getting into a vehicular accident due to reckless driving, you’ll likely pay a larger premium compared to someone who has a clean record.

  • Deductible or excess

The deductible or excess fee in South Africa refers to the amount of money you have to pay out-of-pocket before your insurance claim gets approved by the insurer. Insurance policies in SA that have high deductibles are usually charged with lower premiums.

  • Policy coverage

This defines the maximum amount the insurer can pay for the damages covered under the policy. The amount limit may be set per injury or damage, per period (i.e. annual, monthly, or quarterly), or for the rest of the policy duration. The valid conditions that will give you the eligibility to claim the insurance money are also defined here.

An important thing to take note of is that the greater the policy coverage, the higher the premium you’ll have to pay to get insured.

A policyholder is required to pay the monthly premium to maintain the insurance coverage they applied for. The insured entity can then file an insurance claim in case an accident happens, as long it’s valid and within the coverage stated in the policy. But before you can claim the insurance money, you have to pay the deductible or excess fee first.

Types of Insurance

Here are the most common types of insurance policies available in South Africa.

This helps cover the cost of damage done to your car, to another property, or to another person in case of road accidents.

Know more about care insurance policies in-depth here.

Travel insurance covers the cost of trip cancellations, medical expenses during the travel, and damage to personal effects.

Learn more about how travel insurance works by reading our in-depth article here.

  • Health insurance

Health insurance is designed to protect you from the cost of getting sick by providing you with a fixed amount of money to pay for your treatment.

Find more about this kind of insurance here.

  • Medical insurance

This helps you cover the costs of being hospitalized due to specific illnesses. The amount covered will depend on the kind of medical attention you need.

Choose the best medical insurance by reading our guide here.

  • Life insurance

This type of insurance covers you from serious illnesses and disabilities by giving you an alternative income stream or a lump sum payment to support your daily expenses. It can also support your dependents in case of death.

Learn more about this type of insurance in our article here.

  • Home insurance

Home insurance helps mitigate the cost of rebuilding or repairing your home that’s been damaged by calamities, fire, lightning, and similar incidents.

Find more about home insurance policies here.

Top 10 Insurance Companies in South Africa

Here’s a list of the best insurance companies in South Africa in no specific order.