Your car insurance is set to rocket due to SA’s junk status rating
South African consumers and businesses should prepare themselves for a big increase in their car insurance premiums according to the South African Insurance Association’s (SAIA) chief executive, Viviene Pearson.
Pearson noted that while junk status would have far-reaching consequences for every South African, the downgrade by Standard and Poor’s is expected to hit the short-term insurance industry in particular.
“The cost of motor parts, which are mostly imported, will increase exponentially, which is likely to lead to increased repair costs followed by increased premiums for policyholders; over and above an already higher cost of living for consumers.
“This could expose consumers to financial risks in the event of a loss or damage to assets. Furthermore‚ motor body repairers building industry and others‚ will feel the pinch of less work‚ leading to job losses,” said Pearson.
“This is all something that our country cannot afford at a time when the economy is growing at the slowest pace since the 2009 recession‚ and with the official unemployment rate sitting at 27%.”
Pearson concluded by asking that all leaders in government, business, labour and civil society, work together to ensure a stable and sustainable political, social and economic environment for all South Africans.
Read: The best and worst short-term insurers in South Africa in 2017
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