South Africans cut back on household insurance as recession bites

South Africans cut back on household insurance as recession bites

22% of respondents to a new online poll conducted by ooba, South Africa's leading bond origination company, say they have no household insurance cover, while 14% say they have cut back on coverage in order to pay lower premiums, as last year's recession continues to impact on consumers. Only 3% said they have increased their coverage.

"These numbers are concerning," says Bradd Bendall, Head of Sales ooba. "While it is understandable that people are looking for ways to reduce monthly expenditure, given the recession South Africa has experienced, this is one of the last areas where people should be looking to cut corners.

Bendall says that the recent rate cut should provide some light financial relief for consumers and is an opportune time to review their finances.

"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." Official statistics released last year by SAPS for the 2008/09 financial year revealed that there was a 27.3% increase in household robberies on the previous year.

According to the ooba poll, 19% of respondents say they have spoken to a financial advisor to see whether there is a way of reducing household insurance costs without cutting benefits. Bendall says this figure is quite encouraging and advises people who are struggling financially to follow this route rather than automatically deciding to cancel or reduce cover. Deats says people will be surprised at how much they can reduce their monthly premiums by shopping around and tailoring solutions to best suit their particular needs.

"When times are tough and people are struggling to make ends meet, insurance is often one of the first costs to be cut but one should really think twice before cancelling any existing policies as the consequences if something does happen can be extremely severe for family and dependants."

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