It’s pretty simple really – if you choose not to be insured, you give up any possible support if or when disaster strikes.
This statement is an example of oversimplification. Many of us are guilty of using it as a tactic to convince ourselves that we don’t need do something which makes us uncomfortable.
In reality though convincing yourself that you are immune to life’s risks means that you are actually accepting risk into your financial lifestyle.
I’ve had the privilege of dealing with people from many different walks of life, some of them were properly planned and some of them had no planning whatsoever. The one common thread through them all though, is that they viewed insurance as a grudge purchase. Every month when an insurance premium would go off their bank account, they would look at the premium and grumble away at how much insurance costs them.
All the grumbles aside, insurance is that type of purchase that you never need it until you need it. The converse is far more doom and gloom. What happens if you need it and you don’t have it?
Let’s look at just one simple scenario and build on it as we go on.
- You crash your car into a traffic light.
What are the risks of not being insured in this scenario? Firstly and most obviously, the damage to your car is the financial risk that you’ve accepted by not being insured. The cost of repairing your car falls entirely on your ability to afford these repairs which could run into the hundreds of thousands of Rands. If you are a person who relies on on a working vehicle to get to work each day, this cost is amplified by the hiring of a vehicles and/or public transport costs. Something more to think about, who pays for the cost of the damage to the traffic light?
- You crash your car into another car.
While you may be able to estimate and have enough saved up for possible damages to a car that’s suited to your lifestyle, you are just one of many motorists on a public road and cannot control which other car you may collide with. The cost of damages to another person’s property poses a significant real risk. While you may be able to afford damages to your 2015 BMW 3 Series, the 2021 BMW M3 you’ve just crashed into is significantly more expensive to repair or replace.
- You crash your car into a tree and are hospitalised.
You have insured your car, no problems there. But you don’t have any medical aid.Private medical care in South Africa is not cheap and getting the best care at a government hospital may not always be possible due to capacity issues and availability. The deposits that private hospitals require at admission are just the start as further expenses for doctors consultations, surgeons, medical administration, disposables and meals may inflate the bill that is due after your accident has been long forgotten.
- You crash your car into a tree and are permanently disabled.
Becoming disabled or impaired means that you have to relearn aspects of your daily life that were second nature. The road to recovery is difficult and long. Over and above the physical recovery, you may need to make adjustments to your home that will allow you to function or get hospice to assist with your care. Often over-looked is that you may not be able to work after your injury causing your income to cease and savings to deplete.
- You crash your car into a tree and die.
Death is the final chapter in our lives, this is true for each and every one of us. We all hope to leave legacies of joy, happiness and memories for our families. The sudden death of a bread winner in a household may have devastating effects on the lives of those that are left behind.
Worst of all, the above scenarios are neither exhaustive nor exclusive of each other, meaning that some or all scenarios may occur at once.
The REAL RISKS of not being insured are not easy to see and they’re even harder to see if you choose not to look at all.
Are you insured for all of life’s risks?
Leave a comment below and let me know.
