We all want to be treated fairly, but what is fair? A look in the dictionary will come up with the following: impartially and treated with respect; free from favour toward either side; to achieve a proper balance of conflicting interests. In South Africa insurance companies are highly regulated and one of the requirements by law is that insurers should set fair premiums to enable all South Africans to afford insurance as far as possible.

The insurance companies all have a code of conduct in which they promise to set fair premiums and handle claims in a fair and efficient manner. But fair means “to both sides” and unfortunately, car insurance in South Africa is high due to the high risk of accidents, car theft and carjackings.

If one look at insurance you would expect that the insurance premium should be fair in relation to the value of the property you insure. Yet you will find that you can insure your house for much less than what it will cost you to insure your car. Your house may be worth R2 million and your car R350 000. You may feel that this is unfair.

The reason for the difference in the price of insurance is that short term insurance premiums are based not only to the value of the property but more on the risk involved (and a number of other factors.) So, when you decided whether a car insurance premium is fair, compare it to other car insurance and remember… it’s much easier to steal a car than to carry away your entire house.