Insurance is meant to protect you from financial shocks, not become one. Yet many South Africans are paying more than they need to because their cover is not optimised, their risks are not clearly communicated to insurers, or their policies have not been reviewed in years. This guide explains practical, lawful ways to reduce what you pay for short-term cover (car, home contents, buildings, business) and long-term cover (life, disability, and critical illness) without leaving yourself dangerously exposed.
Golden rule: aim for best value, not the absolute cheapest premium. Cutting the wrong corners can lead to claim repudiations, the application of average, or benefits that do not meet your needs when it matters most.
Why premiums keep rising (and what that means for your strategy)
Premiums are influenced by your individual risk profile and by broader market factors. In recent years, inflation in repair and replacement costs, higher vehicle parts prices, weather-related claims, and crime trends have pressured insurers to re-price risk. You cannot control the market, but you can control your personal risk signals and policy structure. The goal is to signal lower risk, remove waste, and buy cover more intelligently.
The biggest cost saver: eliminate underinsurance, not cover
Many people try to lower premiums by reducing sums insured. That can backfire because of the average clause in short-term insurance. If your home is insured for R1 million but would cost R2 million to rebuild, you are 50% underinsured. On a R200 000 claim, the insurer may only pay R100 000. The premium may be lower, but the outcome is far worse. Rather use the strategies below that reduce price without weakening your protection.
Nine quick wins you can action this week
- Increase your voluntary excess sensibly. A higher excess lowers your monthly premium because you are retaining more risk. Only choose an excess you can genuinely afford on short notice.
- Consolidate policies with one insurer. Multi-policy or multi-vehicle discounts are common. Bundle car, home, and portable possessions where it makes sense.
- Install and verify security. Working trackers, immobilisers, dashcams, alarms, burglar bars, electric fencing, and 24/7 armed response can reduce premiums. Supply proof and ensure certificates are up to date.
- Use telematics or behaviour-based programmes. Agree to share mileage and driving behaviour data. Low mileage, gentle braking, and daytime driving typically qualify for better rates or cashbacks.
- Limit drivers and usage. Named driver policies, business-use exclusions if you do not need them, accurate annual mileage, and secure overnight parking all help.
- Right-size cover, not downsize protection.
- Cars: insure on retail value unless your policy dictates otherwise; confirm whether write-offs are based on repair ratios you accept.
- Home contents: conduct a room-by-room inventory and update values to current prices.
- Buildings: insure for rebuild cost, not market value, using a reputable calculator or quantity surveyor estimates.
- Pay annually if cash flow allows. Some insurers discount for annual payment. If not, monthly debit order remains fine.
- Polish your risk profile. Stable address history, claim-free periods, accurate disclosure of occupation, safe storage of high-theft items (bicycles, electronics), and no prior policy lapses all count.
- Ask for a claims-free or loyalty review. After 12–24 months without claims, request a premium reassessment. Provide proof of improved risk measures since inception.
Car insurance: laser-focused tactics
- Choose the correct cover type.
- Comprehensive: best for vehicles with finance, higher value, or where theft risk is material.
- Third-party, fire and theft: viable for older cars where collision cover is less critical.
- Third-party only: least cover but protects against liability; use with caution.
- Confirm insured value basis. Retail value is a common reference and usually provides a fairer payout basis than trade. Market value may be used by some insurers. Confirm which applies and how often it is updated.
- Reduce the theft risk profile. Two-point immobiliser, tracking device with active subscription, microdotting where applicable, and parking in a locked garage at night are strong price signals.
- Adopt telematics. Participating in mileage-based or behaviour-based cover can yield significant savings if you drive less or safer than the average.
- Add an experienced regular driver where appropriate. Young or newly licensed drivers raise the premium. If they seldom drive the car, structure the policy accurately and consider learner driver restrictions.
- Avoid nuisance claims. Small, frequent claims spike your risk score more than one moderate claim. Self-fund minor issues below or near your excess.
- Windscreen options. If your insurer offers a separate glass excess or add-on, weigh whether it is cheaper over a full year than occasional out-of-pocket glass repairs.
- Accessories and modifications. Declare everything (rims, sound systems, canopies, tow bars). Undisclosed accessories complicate claims and may undermine cover.
- Cross-shop intelligently. Secure at least three comparable quotes using identical excess, values, and benefits. Ask each insurer to price with and without telematics to see the difference.
Home contents and buildings: prevent average, prove security
- Do a proper inventory. Use a simple spreadsheet by room: furniture, electronics, clothing, appliances, sports gear, and high-value items. Update values to current replacement prices, not what you paid.
- Specify high-value items. Jewellery, watches, art, bicycles, and cameras may require specification and valuation certificates. Specified items are rated differently and often covered worldwide.
- Improve physical security. For many policies, discounts apply when you have burglar bars on opening windows, security gates on all exterior doors, an alarm linked to armed response, and perimeter protection.
- Install surge protection and maintain compliance. Given power surges, installing surge protection and maintaining a valid electrical compliance certificate can strengthen your risk footprint and smooth claims.
- Geyser and water-leak mitigation. Geyser blankets, drip trays, smart leak sensors, and pressure control valves lower water damage frequency. Some insurers offer premium benefits or excess waivers when these are in place.
- Buildings sum insured: rebuild cost only. Include professional fees, rubble removal, municipal approvals, boundary walls, and outbuildings. Review annually due to building-cost inflation.
- Portable possessions cover. Only insure what you actually carry outside. Remove old items and update serial numbers. Consider a technology refresh list every 12 months.
Life, disability, and critical illness: reduce cost without weakening cover
- Health and lifestyle improvements. Non-smoker rates are materially cheaper. If you stop smoking and remain nicotine-free for 12 months (often confirmed through testing), request a re-rate. Weight loss that moves your BMI into a better band, controlled blood pressure, and improved blood profiles can all support lower premiums.
- Select the right benefit structure.
- Life cover: level vs decreasing term, joint vs single life, and accelerated vs stand-alone trauma benefits all price differently.
- Disability: own occupation vs any occupation definitions, waiting periods, and whether the benefit is lump sum or income type.
- Critical illness: tiered severity payouts cost more but pay earlier; choose definitions that match your risk tolerance rather than always buying the richest version.
- Choose sensible waiting periods. Longer waiting periods on income protection or temporary disability can lower premiums if you have emergency savings.
- Exclude hazardous pastimes when suitable. If you do not engage in scuba, aviation, motorsport, or mountaineering, ensure these are not bundled in and pushing up price.
- Review sum assured after big life changes. New bond, dependants, or debt changes should trigger a recalculation. You may be over-insured on legacy policies.
- Consider bundling wellness programmes. Some insurers integrate wellness or activity points that can improve premiums over time if you engage consistently.
- Underwriting refresh. If your health has significantly improved since the original underwriting, ask for a repricing or replacement policy comparison. Ensure there are no gaps in cover during transitions.
Important: never cancel an existing life policy before any replacement policy is fully underwritten, accepted, and in force. Losing an older policy’s underwriting basis can be costly if your health profile has worsened.
Business insurance: do not pay for cover you do not use
- Match cover to operations. If you no longer use certain equipment, locations, or vehicles, remove them. Align business interruption indemnity periods to realistic rebuild timelines.
- Risk management for discounts. Fire suppression, certified electrical compliance, armed response, CCTV with off-site backup, and access control systems can reduce rates. Keep maintenance logs and certificates.
- Driver management. Telematics across a fleet, fatigue management policies, and defensive driver training lower accident frequency and premiums over time.
- Stock valuation discipline. Keep accurate rolling valuations. Agree a basis (cost or selling price) that truly reflects your risk to avoid overpaying.
Optimise your excess strategy
Your excess is a powerful lever. Consider a layered approach:
- Standard excess: the baseline in your schedule.
- Voluntary excess: add a voluntary excess to reduce premiums, but only to an amount you can pay on a bad day.
- Item-specific excesses: sometimes glass, theft, or power-surge excesses can be customised.
Run the numbers annually. A premium saving of R200 per month (R2 400 per year) for increasing your excess by R3 000 may be favourable if you rarely claim and have an emergency fund.
Negotiate like a pro: what to tell your insurer
When requesting a premium review, present clear, verifiable risk improvements and ask for a documented reassessment. Use this script as a guide:
“Since my last renewal I have installed a [SABS-approved alarm linked to armed response / tracking device / electric fence], park my car in a locked garage, and my mileage has reduced to [x] km per month due to remote work. I have been claims-free for [x] months. Please reassess my risk and provide a revised premium. If telematics-based options or multi-policy discounts are available, kindly price those alternatives as well.”
Request the outcome in writing and keep any supporting proof (installation certificates, service agreements, mileage logs, or telematics reports).
Switching insurers: the smart way
- Ask your current insurer to match the best quote. Loyal clients with good claims records are valuable. Many insurers will try to retain you if the competing proposal is credible and like-for-like.
- Line up cover with no gaps. Start the new policy a day before cancelling the old one. Confirm endorsements and security conditions are satisfied from day one.
- Transfer your no-claims record. Ask your current insurer for a claims history or no-claims letter to support better pricing with the new insurer.
- Check cancellation terms. Some policies require notice. Avoid debit order chaos by aligning dates.
Credit behaviour and premiums
In South Africa, some insurers consider elements of your credit behaviour as part of overall risk assessment for certain classes of insurance. Good account conduct, avoidance of policy lapses, and stable payment history can help you qualify for better pricing. Ensure debit orders do not bounce and keep your contact details current to prevent administrative cancellations.
Common mistakes that cost you money
- Underinsuring to save a few rand. This invites the average clause and painful shortfalls at claim stage.
- Wrong address or usage disclosure. If the vehicle regularly sleeps at a different address or is used for business, disclose it. Incorrect disclosures can reduce or void cover.
- Ignoring endorsements. If your schedule requires a tracker or alarm within a timeframe, install it and send proof. Failure can lead to theft claim repudiation.
- Not updating the inventory. New appliances, laptops, or a home office can push contents values up. Adjust annually.
- Claiming for tiny losses. Small claims may cost more over two renewal cycles than the benefit you received.
- Letting policies lapse. Gaps in cover and reinstatement under new terms can increase long-term costs.
Checklist: your annual premium-reduction audit
- Have I reviewed sums insured against current replacement costs (contents and buildings)?
- Are my security systems functional, certified, and declared on the policy?
- Do I have the optimal excess for my risk appetite and savings buffer?
- Have I removed unused items, specified the right valuables, and updated serial numbers?
- Is my driving mileage lower than at inception and can I prove it?
- Have I been claims-free for 12 months or more and asked for a reassessment?
- Have I compared three like-for-like quotes and asked my current insurer to match?
- Are there multi-policy or telematics discounts I am not using?
- Have I considered annual payment to unlock a discount (if offered)?
- Are my documents in order (invoices, valuations, security certificates, compliance certificates)?
Ticking most of these boxes should produce a measurable premium reduction without compromising your safety net.
Quick reference: discount levers by insurance type
| Cover type | High-impact levers | Medium-impact levers | Low-impact or situational |
|---|---|---|---|
| Car | Telematics with low mileage; secure overnight parking; tracking device; higher voluntary excess; claims-free period | Named driver restriction; driver training; dashcam evidence; consolidate policies | Annual payment; limited business use |
| Home contents | Alarm + armed response; burglar bars and gates; accurate, updated inventory; specify high-value items correctly | Smart leak or smoke sensors; safe for jewellery; community security membership | Annual payment |
| Buildings | Correct rebuild sum insured; compliance certificates; perimeter security | Geyser management and leak detection; surge protection | Gardening or roof maintenance plans documented |
| Life/Disability/Critical illness | Non-smoker status; improved BMI and health metrics; appropriate benefit design; sensible waiting periods | Bundled wellness programmes; occupational risk re-assessment | Premium frequency choice |
| Business | Telematics across fleet; fire and security systems; accurate stock valuations; remove unused assets | Staff training and risk logs; off-site data backup for BI risks | Annual payment terms |
Final word: review, document, and communicate
Insurance is not set-and-forget. The more your life changes, the more your risk profile changes. Build a rhythm:
- Quarterly: update inventories and serial numbers; verify security systems.
- Annually: obtain three competitive quotes, request a loyalty or claims-free review, reassess excess, and confirm sums insured.
- Immediately: after any material life change (new job, move, business change, health milestone), inform your insurer or broker and request a re-rate.
With deliberate maintenance of your risk profile and careful policy structuring, you can meaningfully lower your premiums while improving your peace of mind.
Sources
- Financial Sector Conduct Authority (FSCA): Consumer guidance on short-term insurance
https://www.fsca.co.za/Consumers/Pages/Insurance.aspx - Ombudsman for Short-Term Insurance (OSTI): Guidance on claims, underinsurance, and average
https://www.osti.co.za/ - South African Insurance Association (SAIA): Consumer education on avoiding underinsurance
https://saia.co.za/consumer-education/ - Association for Savings and Investment South Africa (ASISA): Life insurance and underwriting basics
https://www.asisa.org.za/ - Arrive Alive: Usage-based insurance and telematics overview
https://arrivealive.co.za/Usage-Based-Insurance - National Regulator for Compulsory Specifications (NRCS) and SABS: Safety and compliance context for security and electrical devices
https://www.nrcs.org.za/
https://www.sabs.co.za/ - South African Police Service: Crime statistics (to contextualise risk trends for security improvements)
https://www.saps.gov.za/services/crimestats.php - Insurance Ombud system overview (FAIS Ombud and related)
https://www.faisombud.co.za/
Lethabo Ntsoane holds a Bachelors Degree in Accounting from the University of South Africa. He is a Financial Product commentator at Rateweb. He is an expect financial product analyst with years of experience in reviewing products and offering commentary. Lethabo majors in financial news, reviews and financial tips.
He can be contacted:
Email: lethabo@rateweb.co.za
Twitter: @NtsoaneLethabo
