Walk into any buzzing coffee shop on a Monday morning and you’ll hear South Africans confidently customising their orders with additional shots of espresso, specific foam ratios and various milk alternatives. We have the time to hyperfocus on our daily caffeine fix, but often when it comes to other key daily essentials, like insurance, many of us still rely on default cover we don’t fully understand.
This is according to Sherry Sibeko, Executive Head for Personal Lines at Miway, who is challenging South African policyholders to consider their policy composition as carefully as they do their daily coffee order, ensuring it’s exactly right.
“Most people take out a policy and hope for the best but taking the time to understand how excesses and add-ons work and how to adjust them, can have a significant impact on how you are covered day-to-day.”
Starting with the basics, Sibeko explains that an insurance excess is the portion of a claim that is paid out of pocket before an insurer steps in. “It’s one of the most important details in your policy, as it directly affects both what you pay each month and what you’ll need to cover in the event that something goes wrong.”
Most policies come with a default excess level, pre-set by the insurer based on a typical risk profile. While this offers a convenient starting point, it doesn’t necessarily reflect an individual’s circumstances. “Factors like how you drive, where you live, or how often you’re exposed to certain risks should all be taken into account when choosing the ‘right’ excess,” says Sibeko.
A higher excess can bring down monthly premiums, but it also increases the amount that will need to be paid in at claims stage. A lower excess, on the other hand, may raise premiums, but can provide meaningful relief at claim stage. “The ‘right’ excess will therefore depend on your monthly disposable income, coupled with how much of a financial knock you can realistically absorb in the event of a claim.”
“But excess is only one part of the equation,” Sibeko adds. “Add-ons are another valuable layer of control that allow policyholders to shape their cover around their personal profile and real-life risks.”
For drivers, this could include rental options that keep you mobile if your car isn’t, or roadside assistance for breakdowns on long routes. For homeowners, there are optional add-ons for locks and keys, or lightning and power surges.
When used strategically, Sibeko says that the level of excess and optional add-ons can work together to create the ideal policy, the insurance equivalent of your tried-and-tested customised coffee order. “Just like a standard cappuccino isn’t for everybody, some policyholders opt for a slightly higher excess to reduce their premium, while adding targeted protections that limit disruption in high-risk scenarios.”
“What’s most important is that you’ve taken the time to understand what works for you, adjusting as necessary to ensure your cover aligns with how you actually live,” says Sibeko. “After all, default cover is built for the average customer, but most South Africans’ lives are far from average,” Sibeko concludes.
By Sherry Sibeko, Executive Head for Personal Lines at Miway