• SelfSure Team

How to Become Your Own Insurer

Updated: Oct 3, 2019

For most vehicle owners, car insurance is a necessary evil; vehicle owners know the value of insurance but are generally not happy with their insurance, they either feel they’re paying too much on premiums or feel their excess is too high. It is shocking that about 9 million of the 13 million registered vehicles driving on our roads do not have insurance and majority owners of the uninsured vehicles simply do not trust insurance providers and believe car insurance is a financial gamble not worth playing, but is it?


In every gamble, the odds are always in favor of "The House". Similarly, in every insurance policy, the odds are almost always in favor of the insurance provider. Insurance providers seek to make a profit by charging more in premiums than they payout in claims; insurance providers will almost always make a profit.

What does that then mean? It means if one were to put the supposedly insurance premiums under their mattress instead of paying the insurer, that person should be able to profit the same way insurance providers do and is effectively his own insurer. Is it that simple?



Certainly not, the problem comes when an accident happens earlier before the savings are enough to cover the loss. This won’t be a problem if one has other savings elsewhere to cover the shortfall, if not it may take long to get back on the road.


Insurance should not be discarded only adjusted to make it a springboard of financial wellbeing.

When it comes to insurance premiums there is a few things you can do to make your insurance work better for you:

  1. Reduce your risk profile in the eyes of the insurance provider. There is a couple of ways to do this. This includes getting married if you single, yes married drivers generally pay lower on their car insurance premiums than single drivers, upgrading the security system of where you park your vehicle, adding a car tracker and remaining claim free just to mention a few.

  2. Self-insuring part of the risk in the form of a higher Excess. This is the most efficient way to make your insurance work better for you, but it is for diligent drivers. The higher the Excess amount, the lower the premium payable. This is because a higher Excess means that you are contributing more in the event of a claim.

Self-insuring part of the risk in the form of a higher Excess is the sure way to becoming your own insurer, but requires a saving discipline.


Example:

Thabo is currently paying R1 ,882 per month on his BMW car insurance premium with an Excess of R1 ,500. Thabo can increase his Excess to R10 ,000. This could reduce Thabo’s premium to R1 ,570 and he can put away R312 every month into his Excess savings account. By driving well, Thabo can build his Excess savings account to R11, 383 within 36 months. After 36 months Thabo could further reduce his premium to about R1,260 and now put R622 every month in his Excess savings account by further increasing his Excess to R20,000.


This way Thabo is becoming more and more of his own insurer. But accidents happen, what if an accident happens before Thabo has saved enough to pay for his Excess? This could be a huge financial burden and can come at a far greater cost. SelfSure Excess Wallet is the sure way to know you can become your own insurer and still remain fully insured. The Excess Wallet will allow you to build up savings while giving you the assurance that your Excess will always be paid.


So there you have it. With SelfSure Excess Wallet you can become your own insurer.


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