Lifestyle and Leisure
South African insurance explained
With a view from the frontline of the industry, Jan Winks sets out a guide to South African insurance, which should enable you to get a clearer idea of the what you need to protect yourself
As you are considering emigrating to the beautiful and intriguing country of South Africa, there are obviously a few things that should be considered – one of which is insurance.
Let's start off with the most important insurance worth considering in the early stages of your move: transit insurance. As many immigrants prefer to bring their household belongings with them, insuring the goods whilst in transit is imperative, it is not uncommon for things to get damaged during the moving process. In my opinion, the advantage of using a South African transit insurer is that they are all based where you will be residing, and will be able to appoint assessors much quicker, and settle the claim faster than a European one can. We have the perfect example in this regard – the 'CS Napoli'. The ship sank next to England and everything was lost. A couple of our new clients had decided that it was not worth insuring as "nothing would happen" and unfortunately, all their possessions that were on the ship are now lying on the ocean floor.
The second most important and often more concerning aspect of insurance is Medical Aid. Social healthcare in SA doesn't match the NHS (even though Brits are often complaining about the level of service!); state hospitals in SA are notorious for having huge queues and very long waiting periods. Therefore, private medical insurance or medical aid becomes imperative for the European immigrant. Medical Aid in South Africa can be quite complex and hard to understand, it is essential that you obtain professional advice and understand everything that you are insuring yourself for. South African medical insurance companies are not allowed to reject anybody as a client, even taking into account the insurer's age, health or previous medical aid. Therefore, every immigrant can be assured of obtaining Medical Aid in South Africa. Medical Aid companies need some kind of protection in place, thus the government has put in place a set of protective measures, which the companies may include in their contracts should you fall into one or more of the categories below:
Late Joiner Penalty (LJP): If you are over the age of 35, and have never had medical insurance in South Africa you will be charged a LJP, which is implemented in the form of a slight loading on your premium. The higher the quantity of years from the age of 35 will equate in a higher loading per year of age, therefore the older you are the higher the loading will be. The reason this is done is that the insured would not have contributed to the medical insurance pool, and it therefore is considered unjust.
12-month condition specific exclusion: The insurer's underwriters may exclude certain pre-existing conditions and related conditions for 12 months. For example, if the insured has a heart condition and they have any heart-related problem the insurer will not cover it for a period of 12 months.
Three-month general waiting period: This is often considered a harsh penalty, as the insurance company will not cover any illness or injury for three months, though the client will be contributing their premium to the pool. This exclusion is seldom effected, as to fall into this category one must have had a history of illness.
For the reasons above it is essential to get into contact with an experienced broker that can give you independent advice as well as help you find a way around these problems. Once you have arrived in South Africa you will no doubt need to insure the items that you have imported or the new goods/vehicles that you have purchased in the country. In South Africa we do things slightly differently in terms of insurance. Below are some interesting facts about how we insure our possessions.
South Africa insurance facts
Contrary to many European countries, in South Africa it is not obligatory to take out short term, for example, car insurance, or Medical Aid insurance. Nevertheless, it is advisable, if not essential, to do so. It is not uncommon, if involved in a car accident, for the other driver not to have insurance; therefore any claim would come from one's own insurance.
In South Africa we insure the car as opposed to Europe, where the driver is insured. In explanation, in Europe one can drive any vehicle and it will be insured in the event of a claim – assuming one's income is fully comprehensive. But in South Africa if the driver is not stated on the policy as one of the regular drivers on the specific vehicle, they will not be insured in terms of an accident. Not all companies apply the aforementioned rule, as long as the person that incurred the accident had the insured's permission to drive the vehicle, it will be insured.
Sasria cover is included in every insurance policy in South Africa. It covers the policyholder against politically motivated crime. Premiums are relatively cheap for quite a large amount of cover offered.
South African insurance has been adapted to deter the insured from claiming for unnecessary events or for fraudulent claims. The form of the deterrent is what is known as 'Excess' or 'First Amount Payable'. In the event of a claim the insured is responsible for the first portion (Excess). It is calculated differently for the different risk categories and it is all relative to the sum insured.
The 'Golfers hole in one' is an added benefit to the insurance policies. If the insured is an avid golfer and manages to strike a Hole In One, the Insurance Company will pay up to R500 for the round of drinks thereafter. This cover is available on most personal policies that have contents (household good) as part of the cover.
In South Africa we refer to the insurance of personal items and possessions as 'Short Term Insurance', where overseas it is referred to as 'General Insurance'.
It is normal to have one insurance company to cover all the sections of a policy. For example, the selected insurance company would cover the vehicles, building and contents under the same policy. However, if necessary, it is possible to insure the different sections with different insurers. The advantages of having placed all one's insurance with the same insurer, is that the majority of the time it is cheaper, as one would not be paying many different companies an administration fee.
In South Africa you cannot take out insurance to cover medical damages that you may inflict on someone else in an accident. You can either cover it from your own pocket, hope they would be covered by their own insurance or that they can claim from the Road Accident Fund. Due to the high percentage of people that do not have motor insurance, the South African government has imposed a levy on motor fuel. This fund covers bodily damage should one not have Medical Aid, but does not cover any damage to one's property.
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