Your car insurance renews on the same day every year, and in most years you do nothing except pay. The premium creeps up, you tell yourself that is just how it is, and the debit order carries on. For most households, car and home insurance are a big recurring cost, and very few people shop around for them.
You can cut the cost without cutting the cover, but the cheapest quote is not always the best one. This guide covers how premiums are built, which levers actually lower them, and the mistakes that leave people with a reduced claim or no claim at all.
The short list:
- Compare quotes before each renewal, with identical cover so the prices mean something.
- Choose your excess deliberately, based on what you could pay on the day.
- Insure for the right amount, not the lowest amount.
- Read the exclusions, because that is where most rejected claims come from.
- Keep your details accurate, and know what to do if a claim is rejected.
What makes up your premium?
Insurers price car and home cover from risk: who drives the car, where it is parked at night, what it is worth, how old you are, where the house is, how it is built, and what security you have. They also add the cost of running the business. You cannot change your age or your suburb, but you can change several of the details and choices that sit on top of them.
The two parts of the policy that move the price most are the cover you choose and the excess you agree to carry. The excess is the amount you pay yourself on every claim before the insurer pays anything.
How does a higher excess save you money?
A higher voluntary excess lowers your monthly premium, because you are taking on more of the risk. Whether it pays depends on how often you claim and what you could find in a bad week.
Take a worked example with made-up numbers. You raise your excess by R4,000 and your premium drops by R150 a month. You save R1,800 a year. The extra R4,000 you would pay on a claim takes about 27 months of savings to earn back (R4,000 divided by R150). If you claim less often than about once every 27 months, a higher excess comes out ahead. If you have no savings at all, it can turn a small accident into a crisis, so match the excess to your buffer. The guide to starting a buffer fund shows how to build one, and the guide to car finance and balloon payments covers another car cost that comes with a bill attached.
What else lowers a premium?
- Fewer drivers and less use. Only name the drivers who really drive, and tell the insurer if your annual distance has dropped.
- Security. Many insurers give a discount or require specific devices, such as a tracker for some vehicles or an alarm and burglar bars for some homes. Ask which ones count before you buy anything.
- Parking and use. A car kept in a garage overnight usually costs less to insure than one parked on the street. Describe the use accurately, because business use costs more than private use.
- Bundling. Ask whether your insurer discounts you for holding motor and home cover together, and still compare the bundled price with two separate quotes.
- Claims history. A claim-free record is often rewarded. Before you claim for a small repair, compare it with your excess, because a claim just above the excess can cost you more in lost discounts than it returns.
- The renewal itself. Get a fresh quote for the same cover each year. A loyal customer is not always a cheaper one.
These are the levers South Africans already reach for. Santam's 2025 Insurance Barometer (a survey of 881 people, run between January and April 2025) found that 36% of insured individuals had tried to bring their premiums down, up from 29% in 2023. The most common routes were tracking or monitoring devices (13%), combining motor and home cover (12%) and driving less (11%). Santam also reported that many consumers were raising their excesses and insuring assets for part of their value. The first three are real savings. The last one is where the trouble starts.
What is the mistake that costs the most?
Under-insuring. If the amount you insure your household contents for is lower than the real replacement value, many policies apply an "average" clause: the insurer pays only the same proportion of your claim as the proportion you insured.
Here is how that looks with made-up numbers. Your belongings would cost R300,000 to replace, but to save a few rands a month you insure them for R150,000. That is half the value. A burglar takes R60,000 of goods, and the insurer pays half, R30,000, even though the loss is well inside your R150,000 limit. You carry the other R30,000. How your policy settles a loss is set out in its wording (look for the "basis of loss settlement"), so check yours rather than assuming.
For a car, check how the policy values it, because in a total loss the payout is built on the insured value. For home cover, know the difference between building cover (the structure, which is usually the owner's job) and household contents (your belongings, which renters need too). If you rent, your landlord's insurance does not cover your things. Update your contents value after big purchases, and keep photos and receipts for valuable items.
The second costly mistake is wrong information. If you say the car is parked in a garage and it is not, or leave out a driver, the insurer can reject a claim. Tell your insurer when things change: a new address, a new security system, a new driver, a renovation.
Which exclusions actually get claims rejected?
The biggest single reason people complain about car and home claims is a rejection under a policy exclusion. The National Financial Ombud Scheme (NFO) published its 2025 annual report in June 2026, and the pattern in its non-life insurance division is clear:
- Motor made up 35.4% of the complaints the division finalised, and 70% of those were accident claims. The main reason for a complaint was a claim rejected under a policy exclusion. The leading exclusion was driving under the influence of alcohol, up 67% on 2024. With December parties and long road trips ahead, that is worth knowing before you drive home from one. Claim delays and disputes over misrepresentation or non-disclosure at the start of the policy also featured, with delays up 13%.
- Homeowners' cover made up 27.5% of complaints. Acts of nature were 42% of them, and burst water apparatus such as geysers 15%. Rejections for gradual deterioration, lack of maintenance or wear and tear rose 17.5%.
The practical lessons follow from those numbers. Read the exclusions and warranties before you need them, and ask your broker or insurer to point them out. For the home, keep the geyser, roof and plumbing maintained and keep the service records, because "wear and tear" and "lack of maintenance" are among the reasons insurers give for saying no.
What if a claim is rejected?
Do not accept a rejection without reading the reasons. An insurer that rejects a claim must tell you why in writing, and the policyholder rules give you at least 90 days to question that decision. Policies often carry their own time limits as well. One policy quoted in an ombud case gave the customer 90 days to object after the rejection letter and then six months to serve a summons, so check the wording of yours and act early rather than waiting.
Start with the insurer's complaints process, in writing, and keep a record of every call, email and promise. The NFO only takes a case once you have been through the insurer's own process. The short-term insurance ombud (OSTI) is now part of the NFO, which is free to use and can be reached on 0860 800 900. Its non-life division can consider claims up to R10 million for homeowners' or buildings cover and up to R5 million for all other cover, which covers essentially every personal car and home policy.
How can Budget Hub help?
Car insurance and home insurance each have their own expense category in Budget Hub, so you can see what protection costs you every month next to your other fixed costs. If you import a bank statement as a CSV, the Analytics page lists your top merchants and detects recurring bills, which makes it easy to spot a debit order that has crept up. The free plan includes one upload a month and the first 50 transactions. For annual premiums, the guide to budgeting for annual bills shows how to spread the cost across the year. The same compare-the-cover-not-just-the-price rule applies to medical aid and funeral cover.
Quick answers
Does a higher excess lower your premium?
Yes, because you carry more of each claim yourself. It only makes sense if you could pay the excess on the day without borrowing.
Is the cheapest quote the best one?
Not necessarily. Compare the sum insured, the excess, the exclusions and the claims process side by side, because a lower price can hide lower cover.
What happens if you insure your belongings for less than they are worth?
Many policies apply an average clause, so a claim is paid in the same proportion as the value you insured. Insure for half the real value and you can expect roughly half of any claim, so check your policy's loss settlement wording.
Who can I complain to if my claim is rejected?
Complain to the insurer in writing first. If you are unhappy with the response, the National Financial Ombud Scheme, which now includes the short-term insurance ombud, handles personal car and home policy complaints free of charge.
Sources: SARS personal income tax. Rates, limits and thresholds change, so check the source for the current figure.
Put your renewal date in your calendar a month ahead, get two or three quotes for the same cover, and decide your excess on purpose. Doing it once a year is the cheapest saving most households never make.