Short Term Insurance


What is short term insurance?

Short term insurance in simple terms is an agreement between a policyholder and in insurer. All types of insurance policies other than life insurance can be regarded as short term insurance.

It is an old system of risk management that continues to evolve in the consumer-oriented society. It’s a valuable method of ensuring the security of your wealth and possessions without having long term commitment and large premiums that come along with it.

How does it work?

An insurance policy outlines certain risks that will be covered by the insurer should they one day take place.

The amount that you pay to your insurers at prearranged intervals is called a premium. This amount is worked out according to your individual risk profile.

It’s important that you ensure that your cover remains relevant as time passes.

Where to find short term insurance:

In South Africa, there are over 100 short term insurers available. It’s recommended that you get as many quotations as possible.

Ombudsman for Short-Term insurance

The Ombudsman provides consumers with a free, efficient and fair dispute resolution mechanism. Granted recognition in terms of the provisions of the Financial Services Ombud Schemes Act, the Ombudsman acts as a mediator. You can only approach the Ombudsman if you have tried to resolve the issue with your insurer.

What laws govern car insurance in South Africa?

  • Short Term Insurance Act (Act 53 of 1998)
  • Policy Holder protection Rules (Short Term Insurance) 2004
  • Financial Advisory intermediary Service Act (Act 37 of 2002)
  • Financial Services Ombud Schemes (Act 37 of 2004)

Short Term Insurance Act 53 of 1998:

Short Term insurance in South Africa is regulated by the Financial Services Board.

This Act provides for the registration of short term insurers and it controls the activities and administration of these insurers and intermediaries. The Act also regulates policies, commissions, premium collection as well as claims handling.


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