cancell your policy on your vehicle – save R300 a month….but keep R100 000 in s separate saving and call that your “insurance”.
Any damage to your vehicle can be used from there and replaced at a later stage to bring it back to R100 000-00
If you vehicle is a wright off or stolden use up R50 000-00 to get another car.
……..just a thought…..and checking what the responses are….
in a period of 10yrs look how much goes into insurance and you either get 10% or nothing back after every year !!
November 25th, 2009 at 11:06 pm
Not sure where you’re at, but I’m required to show “proof of insurance” card before I can renew my license plates. So telling them that I have an account for “insurance” wouldn’t work and I’d have no legal plates.
November 25th, 2009 at 11:29 pm
the is self-insurance concept,
in my country it is not so much about the my car value. the car can be valued at 20,000 but we still buy comprehensive insurance every year. This is to make sure if we are at fault causing serious damage or even death to the third party, we are covered by insurance against law suit which can be amounted to millions.
based on your question, it is mathematically not viable to be self insured because the premium is only 3.6% and the risk can be much more higher than the premium.
if you have 100,000 and the bank interest is more than 3.6% basically your premium is free. So mathematically it is not viable to self insured in your example
November 25th, 2009 at 11:37 pm
insurance is actually to secure big money with a smaller money (affordable amount).
unless u have already save up r100 000 in ur saving then maybe u can do that.
analysis.
1) how long is to achieve r100 000 with a saving of r300 per month.
2) are we sure that we can put aside 100k for misc (acted as a normal moderate incomer)
3) how much we are willing to sacrifice financially for the future is uncertain but might happen.
4) if you bought the car in cash, do you have an adequate amount of money to buy a new vehicle IF the vehicle is in total lost after 1 week of purchasing.
maybe by answering this question it might help in decisioning. there is no right or wrong answer.
god bless
November 26th, 2009 at 12:15 am
What you are talking about isn’t new. It is self insurance. Most states have regulations how to set up this type of program, however it doesn’t make sense for your average person to do it. It is more for large companies.
November 26th, 2009 at 12:42 am
You must have liability insurance. I think it is a law in every state. You may certainly self insure on everything else (the cost of your car etc) For your own protection you want the liability with a large amount of coverage. If you were in a wreck and someone was seriously injured or killed and it was your fault the other party could come after you for everything you own. Good idea to have the insurance.