Why do we go on forking out for insurance, asks Rich Chanelle from London
I give away about R8 000 a year. I don’t give it to good causes or charities. I don’t even give it to people that I like! I give R8 000 away, every year, to tycoons and multicorporations.
Why not give the money to the homeless or the poor? About R8 000 of my hard-earned cash could buy a lot of hot meals. It could probably finance the digging and setting up of a well in drought-ridden Africa.
Why not spend the money on myself? I love my CDs, I could buy 77 albums for R8 000. Or why not spend the money on my children? I couldn’t begin to say what they would do with 8 000 “big ones”.
Why do I give away R8 000 a year on which I am yet to see any return? The answer is simple: insurance.
For the past two years I have paid about R80 000 to insurance companies. Insurance for the car and the house — even insurance against a car hitting the house.
I pay to insure my bond against redundancy and long-term sickness, so that in the event of me losing my job, the insurance company will pay my mortgage and any other credit agreements for a year. What makes up the bulk of my mortgage? The interest.
I pay holiday insurance to protect me and my family against any injuries or hospital fees that may occur on our annual jaunt.
I pay automobile recovery insurance so that should I break down, my vehicle will be recovered. And then I pay extra insurance on top of that, so that in the event of a breakdown while I’m on holiday, my vehicle will be recovered from the motorway.
I even pay to protect my “no-claims bonus”. This means that if I have a motoring accident and I am at fault, I still keep my bonus. So I am insuring my insurance. Somebody must have paid a consultant big money to come up with that one, and, foolishly, I bought it.
I recently took out a bank loan to buy a computer and was advised to take out the bank’s insurance policy, for protection against redundancy and long-term sickness. (Haven’t I already covered that subject?) As I was purchasing the computer, I was told by the friendly sales assistant that, for an extra R480, I could have the company insurance to cover damages and repair bills.
In the 10 years that I have been paying these rates of insurance, I have never claimed a single cent on any of my policies.
I could have paid all that money (from the non-compulsory policies) into any high- interest account, and could now be reaping the rewards of 10 years of saving. Instead I have paid thousands of rands to help finance multimillion-rand salaries, fund political parties that I may not support, or worse, supply military dictatorships with arms.
Unless I die or crash my car or have my house broken into, I will never see a return on any of the hard-earned money that I have paid into these huge profit-making corporations. Thankfully, none of the aforementioned has ever happened to me and hopefully never will, but is it really worth “giving” so much money away with little chance of receiving any back?
You may think that it’s a small price to pay for peace of mind, but in reality the price is not so small, and if the unfortunate does happen there is no guarantee of a payout, as we tend to rush in and sign insurance documents without studying the conditions properly.
If I buy a new washing machine and am offered a warranty or repair cover, I shall ask one question: if it’s not compulsory, I don’t want it.