Insurance

**mnrvermaak** · 2015/10/21, 06:32 AM

Why aren't more people being their own insurers?

If you take your monthly premium, and put it into an unit trust or something similar you would be well off after a couple of years.

Insurance companies are making a lot of money. Your premium covers your risk profile, their profit margin, and also the running cost of the business. Then if you claim you still lose out.

I know there are some risks, and its not an option if you buy your vehicles with someone else's money (another black hole imho), but I don`t know of that many people who are taking on that role.

**Oldtimer** · 2015/10/21, 06:42 AM

Most people finance their toys and therefore have to submit proof of insurance to the financiers.

Can be done for paid up stuff though.

**FDVisser** · 2015/10/21, 06:50 AM

If you write off your car twice in one year, and your house burn down, you may have a big problem...

**Chris Stoffel** · 2015/10/21, 06:55 AM

My house is insured, but not the contents, and SWAMBO's car. My life is not insured because my kids are grown and my pension fund is enough to look after SWAMBO if I should die. I invest a lot of money in unit trusts. So all the risk is on me.

**FDVisser** · 2015/10/21, 06:58 AM

.

**Hagu13** · 2015/10/21, 07:03 AM

My annual premium on one of my vehicles is 1.07% of insured value. Full comprehensive with zero excess.

So ignoring escalation of the investment (which is subject to risk and not guaranteed anyway) my break even point is 93 years 5 months. With those numbers, self insurance isn't an option.

Also consider that even if you're driving a cheapie that you don't mind, or can afford to lose, what if you hit something worth 7 figures and it's your fault?

**Fluffy** · 2015/10/21, 07:10 AM

Their is a middle road.

House insurance is dirt cheap, as is balance of third party, fire and theft.

Get those and self insure for the high risk stuff like accident, theft and all risks, where you have some level of control via your behavior.

In some socially close knit societies, it is possible for families and friends to form groups of 5 - 10 families who self insure via a common investment instrument.