Last reviewed: November 2026. How we work: our editorial standards, corrections policy and how Curemed is paid. General information, not advice. A personalised recommendation follows a written needs analysis under the FAIS Act.
By Hagop Jaghlassian, CEO at Curemed. Reviewed by Roxanne Hurter-Ehlers, Director of People and Governance.
Short-term insurance pays for loss of or damage to the things you own, such as your car, your home and its contents, and for your legal liability to other people. South African law now calls it non-life insurance. It is different from life cover, which pays out on death, disability or another life event.
In short
- Short-term insurance covers assets and liability: your car, your building, your household contents, portable items and claims against you. The Insurance Act 18 of 2017 calls it non-life insurance.
- Car insurance is not a legal requirement for private motorists in South Africa, and the Road Accident Fund does not pay for damage to vehicles.
- If you insure something for less than it is worth, the average clause can reduce your claim in the same proportion.
- The Policyholder Protection Rules give you a 14-day cooling-off period on a new policy, at least 15 days of grace for a late premium after the first month, and at least 31 days of written notice before an insurer ends your cover for most reasons.
- If your insurer does not resolve a complaint, the National Financial Ombud Scheme (NFO) looks at it for free. Call 0860 800 900.
What is short-term insurance?
Short-term insurance is cover for things that can be lost, stolen or damaged, and for the cost of being held legally liable for harm to someone else. You pay a premium, usually every month, and the insurer pays valid claims up to the amounts and on the terms in your policy.
The Insurance Act 18 of 2017, in force since 1 July 2018, replaced the term short-term insurance with non-life insurance. The Act defines a non-life insurance policy as an arrangement that fully or partially indemnifies loss when an unplanned or uncertain event happens, other than a life event, or a death or disability that does not result from an accident. The industry, and most consumers, still say short-term insurance.
The Act splits non-life insurance into two groups:
- Personal lines: policies taken out by a person for themselves and their household, not solely for a business.
- Commercial lines: everything else, such as cover for a business, its premises, stock, vehicles and liability.
How is short-term insurance different from long-term insurance?
Long-term insurance, which the Act now calls life insurance, pays out on life events such as death or disability. Life cover, disability cover and funeral cover are life insurance. Short-term insurance indemnifies you for a loss to property or a liability. In general, a life policy pays an agreed amount, while a short-term policy indemnifies you for what you actually lost, up to your sum insured.
Gap Cover, which pays shortfalls on in-hospital medical bills, is also sold by short-term insurers. It is regulated separately from medical aid.
What are the main types of short-term insurance?
Most South African households need some combination of the following personal lines cover. Many insurers sell them together in one policy with separate sections.
| Type of cover | What it pays for | Example |
|---|---|---|
| Car (motor) insurance | Loss of or damage to your vehicle, and your liability to other road users | Your car is written off in a collision, or you damage a car belonging to someone else |
| Buildings (homeowners) insurance | The structure of your home: walls, roof, fixtures and fittings, outbuildings and paving | A storm damages the roof, or a burst geyser floods the ceiling |
| Household contents insurance | Movable items inside your home: furniture, appliances, electronics, clothing | A break-in, or a fire in the kitchen |
| All risks (portable possessions) | Items you carry with you, anywhere covered by the policy | A laptop, cellphone or jewellery stolen away from home |
| Personal liability | Your legal liability for injury to people or damage to their property | A visitor is injured on your property and claims from you |
| Commercial cover | Business property, stock, vehicles, business interruption and liability | A fire closes your shop for a month |
What are the levels of car insurance?
- Comprehensive cover: accidental loss of or damage to your vehicle, plus your legal liability to third parties.
- Third party, fire and theft: loss or damage caused by specific events such as fire, theft or hijacking, plus third-party liability.
- Third party only: your legal liability for damage to vehicles and property belonging to other people. Your own car is not covered.
What is Sasria cover?
Damage caused by riots, strikes, public disorder and terrorism is normally excluded from ordinary short-term policies. Sasria SOC Ltd provides this special risk cover. It describes itself as the only non-life insurer that provides special risk cover to individuals and businesses that own assets in South Africa. You get it through your insurer or broker, added to your car, buildings or contents cover, so check that it appears on your policy schedule.
If you have installed solar panels, an inverter or batteries, tell your insurer and confirm whether the system is covered under your buildings or contents section, for what amount, and whether a certificate of compliance is required. Equipment the insurer does not know about may not be covered.
Is car insurance compulsory in South Africa?
No. Private motorists in South Africa are not legally required to insure their vehicles, not even for third-party damage. In October 2026 the South African Insurance Association was reported to support renewed calls to make third-party car insurance compulsory again, as it once was.
The Road Accident Fund compensates for injuries and deaths caused by motor vehicles. It does not pay for damage to cars or property. If an uninsured driver damages your car and you have no cover of your own, you would usually have to recover the cost from that driver yourself, which is one reason why comprehensive cover or at least third-party cover is worth considering.
How is your short-term insurance premium worked out?
Insurers price each policy on the risk it carries. The main factors are:
- what you insure and its value, such as the make, model and year of a vehicle or the rebuilding cost of a house;
- where it is kept, including the suburb, overnight parking and security such as alarms, tracking and burglar bars;
- how the asset is used, for example private use only or business use, and who drives the car regularly;
- your claims history and, for car cover, the driving record of the regular driver;
- the excess you choose. A higher excess usually means a lower premium.
The excess is the first part of each claim that you pay yourself. Many policies have more than one excess, for example a higher excess for a young driver, for a write-off, or for a claim in the first months of a policy. Read the excess schedule before you sign.
Your insurer must tell you in writing, with reasons, about any change to your premium that you did not ask for at least 31 days before it takes effect. At least 31 days before a policy renews, it must tell you the new premium and the premium you last paid (Policyholder Protection Rules, rules 11.6.3 to 11.6.5).
Are you paying too much for your insurance?
Premiums can drift upwards at each renewal even if you never claim. Signs that it is time for a review: your asset values have changed, you moved to a safer area or added security without telling your insurer, you are paying for extras you do not use, such as car hire or an excess waiver, or your policy details are wrong. Incorrect details, such as a wrong construction type for your house, can lead to a higher premium. They can also lead to a rejected claim, which is worse.
What happens if you are underinsured?
Most buildings and contents policies include an average clause. If the sum insured is lower than the real value of what is covered, you are treated as carrying the difference yourself, and a claim is paid in proportion. As Consort explains in COVER magazine, the settlement is the loss amount multiplied by the sum insured and divided by the full value at risk.
An illustration, using round numbers:
- Your household contents are actually worth R400,000, but you insured them for R200,000.
- A burglary causes a loss of R100,000.
- R100,000 x R200,000 / R400,000 = R50,000, before the excess is deducted.
You are paid half of the loss because you insured half of the value. Update your sums insured every year and after any major purchase or renovation. For buildings, insure the cost of rebuilding, which is not the same as the market value of the property.
Give your insurer complete and correct information when you apply and when anything changes. An insurer may reduce or reject a claim if information it relied on to accept the risk was wrong or left out.
What rights do you have under the Policyholder Protection Rules?
The Policyholder Protection Rules (Short-term Insurance), Government Notice 1433 of 2017, protect policyholders who are individuals or small businesses. Key rights:
- Cooling-off: on a new policy with a term longer than 31 days, you may cancel within 14 days of receiving the policy, as long as no claim has been made or paid and no insured event has happened. The insurer refunds what you paid, less the cost of any cover you actually had (rule 4).
- Grace period: if a premium is late, the policy must give you at least 15 days of grace after the due date. On a monthly policy this applies from the second month (rule 15.1). The insurer must tell you in writing within 15 days of becoming aware that a premium was not paid (rule 11.6.6).
- Notice before cancellation: an insurer that wants to end your policy must give you at least 31 days of written notice, except where the premium was not paid, the risk changed materially, or the law requires immediate termination (rule 19.2).
- Claims: the insurer must tell you in writing within 10 days of deciding on a claim. If it rejects or disputes the claim, you have at least 90 days to make representations, and the insurer must respond within 45 days. Any time limit for legal action must allow at least six months after that 90-day period (rule 17.6).
Where do you complain if your insurer rejects a claim?
Start with the insurer. Use its internal complaints process and keep copies of everything. The NFO will only look at a complaint after you have first raised it with the insurer.
If the complaint is not resolved, take it to the National Financial Ombud Scheme South Africa (NFO). It started accepting complaints on 1 March 2024, when the Ombudsman for Short-Term Insurance merged with the long-term insurance, banking and credit ombuds. Its service is free. Under the NFO Scheme Rules:
- a complaint must usually be brought within three years of the date you became aware, or should reasonably have become aware, that you had cause to complain;
- for non-life insurance, the NFO can deal with claims of up to R5 million, or up to R10 million for homeowners and buildings cover, unless the parties agree to a higher amount.
Contact the NFO on 0860 800 900 or through nfosa.co.za.
How can a broker help with short-term insurance?
An independent broker compares cover from several insurers, checks that your sums insured and policy details are correct, and helps you when you claim. You pay the premium to the insurer either way. Ask any broker how they are paid before you buy.
Curemed Advisors compare personal and business short-term insurance as part of our insurance service, and can review your current policies against your medical aid and Gap Cover so that nothing overlaps or falls through the gaps. Ask an Advisor for a comparison.
Frequently asked questions
What is the difference between short-term and long-term insurance?
Short-term (non-life) insurance pays for loss of or damage to property and for your legal liability, up to what you actually lost. Long-term (life) insurance pays an agreed amount on a life event such as death or disability. Car, home and contents cover are short-term. Life, disability and funeral cover are long-term.
What is an excess on a short-term insurance policy?
The excess is the first part of a claim that you pay yourself. Your policy schedule lists each excess, and some claims, such as a write-off or a claim involving a young driver, may carry a higher one.
Can I cancel a new short-term insurance policy?
Yes. On a new policy with a term longer than 31 days you have 14 days after receiving the policy to cancel, provided no claim has been made or paid and no insured event has happened. You are refunded what you paid, less the cost of any cover you had.
What happens if I miss a short-term insurance premium?
From the second month of a monthly policy you have a grace period of at least 15 days after the due date, and the insurer must notify you in writing within 15 days of becoming aware that the premium was not paid. If you do not pay within the grace period, the insurer may end the policy without the usual 31 days of notice.
Is Gap Cover short-term insurance?
Yes. Gap Cover is sold by short-term (non-life) insurers and pays shortfalls on in-hospital medical bills. It does not replace medical aid, which is regulated separately by the Council for Medical Schemes.
