Short-term Insurance

Short-term insurance is a type of insurance that protects your physical assets such as your home, car, and personal belongings against loss or damage caused by events like theft, fire, accidents, or natural disasters. Unlike life assurance, which covers long-term risks such as death or disability, short term insurance policies are typically renewed annually and cover material possessions rather than a person’s life or income.
In South Africa, short term insurance is regulated by the Financial Sector Conduct Authority (FSCA) under the Short Term Insurance Act 53 of 1998.

Short-term insurance in South Africa covers a wide range of personal and commercial assets. Common examples include:

• Buildings and home contents
• Motor vehicles, motorcycles, caravans and trailers
• Personal all-risk items such as laptops, jewellery and cellphones
• Watercraft and leisure vehicles
• Commercial property, business contents and equipment
• Commercial vehicles and fleet
• Goods in transit
• Public and product liability
• Business interruption
• Travel insurance
• Personal accident cover

The specific cover you receive depends on your policy type and insurer. A short-term insurance broker like Ambiton can help you identify the right combination of cover for your specific circumstances.

Short-term insurance protects your physical assets: your home, car, and belongings, against loss or damage. Policies are typically renewed annually and the benefit is paid when a covered event (such as theft or an accident) occurs.

Long-term insurance (also called Life Assurance) covers risks related to a person’s life, health or income over an extended period. This includes life cover, disability cover, income protection, and retirement annuities.

Benefits are paid on death, disability, or the maturity of an investment policy.

In short: short-term insurance protects what you own while long term insurance protects you and your income.

Most individuals and businesses need both.

Examples of short term insurance in South Africa include:

• Homeowners insurance (buildings cover)
• Home contents insurance
• Motor vehicle insurance (comprehensive, third party fire and theft, or third party only)
• Personal all-risk cover (for portable items like laptops, phones and jewellery)
• Travel insurance
• Personal accident cover
• Commercial property insurance
• Business vehicle and fleet insurance
• Public liability insurance
• Business interruption insurance
• Goods in transit insurance
• Professional indemnity insurance

Personal short-term insurance covers your private assets such as your home, car and personal belongings. Commercial short-term insurance covers business assets, vehicles, liability and interruption risks. At Ambiton we handle both, often for the same client.

The cost of short-term insurance in South Africa varies depending on a number of factors, including:

• The type and value of assets being insured
• Your claims history
• The area where you live or where your business is located
• The level of cover and excess you choose
• The insurer and policy type selected

Rather than providing a generic estimate, the most effective approach is to get a properly assessed quote from an independent broker who can compare options across multiple insurers.

At Ambiton, we obtain competitive quotes from our full panel of insurers and recommend the option that offers the best value, not just the lowest premium.

Yes, for most people and businesses, short term insurance is essential. The financial impact of replacing a vehicle, rebuilding a home after a fire, or replacing the entire contents of a house after a burglary is simply beyond what most people can absorb out of pocket.

The real question is not whether to have short term insurance, but whether you have the right cover at the right level.

Being underinsured, which is extremely common in South Africa, can be just as damaging as having no cover at all, since your claim payout may be reduced proportionally if your insured values are below replacement cost.

A regular policy review with your broker is the best way to ensure your cover remains adequate as your circumstances change.

Short term insurance brokers in South Africa are typically remunerated through commission paid by the insurer, not as a separate fee charged to the client.

The commission is built into the premium and is regulated by the Financial Sector Conduct Authority (FSCA).

As a FAIS-compliant broker, Ambiton is required to disclose all fees and commissions applicable to your policy.

You will always know what you are paying, what it covers, and what your broker receives - before you sign anything.

In many cases, yes. Independent short term insurance brokers like Ambiton have access to a wide panel of insurers and can compare cover and pricing across multiple options simultaneously. Because brokers place significant volumes of business with insurers, they often have access to preferential rates not available to direct clients.

More importantly, a broker ensures that you are comparing equivalent cover; not just the cheapest premium. A lower premium with inadequate cover or a higher excess may cost you significantly more when you claim.

Yes. You can take out motor vehicle insurance as a standalone short term insurance policy without insuring your home or other assets. Motor insurance in South Africa is available at three levels:

1. Comprehensive: covers your vehicle for accidents, theft, fire, and third-party liability
2. Third party, fire and theft: covers theft and fire damage to your vehicle, plus damage to third-party vehicles or property
3. Third party only: covers damage you cause to other vehicles or property, but not your own vehicle

Comprehensive cover is recommended for most drivers. If you are financing your vehicle, your finance agreement will typically require comprehensive cover.

Yes, new and young drivers can get short-term insurance in South Africa, though premiums are typically higher due to the statistically greater risk associated with inexperienced drivers.

Factors that affect the premium include your age, driving experience, the type of vehicle, and where it is parked overnight.

An independent broker can help young drivers find competitive cover by comparing options across multiple insurers. In some cases, completing an advanced driving course or fitting a tracking device can reduce premiums.

Yes. Commercial vehicle insurance is a standard component of business short term insurance and covers vehicles used for business purposes, including:

• Delivery vehicles
• Company cars
• Bakkies and light commercial vehicles
• Heavy motor vehicles and trucks
• Fleet vehicles

Commercial vehicle policies differ from personal motor insurance in how they are structured and rated. If you use a personal vehicle for business purposes, it is important to disclose this to your insurer, as undisclosed business use can invalidate a claim.

Yes. Short term event insurance provides cover for a specific event such as a wedding, corporate function, sports event, or exhibition for the duration of that event. It typically covers cancellation or postponement costs, public liability, equipment and hired items, and personal accident.

Event insurance is arranged as a once-off policy rather than an annual policy. Contact Ambiton to discuss the specific cover requirements for your event.

Yes. Equipment insurance, also called all-risk or portable possessions cover, is available for both personal and business equipment. Personal items such as laptops, cameras, phones and sporting equipment can be covered under a personal all-risk policy.

Business equipment including machinery, electronic equipment, tools and specialised devices can be covered under a commercial lines policy.

For high-value or specialised equipment, it is worth getting a dedicated equipment floater policy that covers the item at full replacement value, including while it is in transit or being used off-site.

In most cases, you can only insure a vehicle that you have an insurable interest in. Meaning you would suffer a financial loss if the vehicle were damaged or stolen. This typically means you must own the vehicle or be financially responsible for it.

If you are borrowing someone else’s vehicle temporarily, you may be covered under the owner’s existing policy as a named or occasional driver, depending on the policy terms. It is important to confirm this with the vehicle owner’s insurer before driving the vehicle.

If you have a specific situation - such as a vehicle on consignment or a vehicle in your care, custody or control for business purposes, speak to an Ambiton adviser about the appropriate cover.

Many people are underinsured without realising it, particularly on buildings and contents. We offer a no-obligation policy review to assess your current cover and identify any gaps. 

You contact us directly and we manage the process on your behalf. From notification through to settlement. See our Claims page for more detail. 

Quite possibly. As independent brokers we have access to a large panel of insurers and shop the market on your behalf. We'd rather tell you your current cover is competitive than move you for the sake of it.

You can get short term insurance quotes in South Africa by:

• Contacting an independent short term insurance broker, who will obtain quotes from multiple insurers on your behalf
• Approaching insurers directly for individual quotes
• Using online comparison tools

Using an independent broker like Ambiton is generally the most effective approach, as we compare cover and pricing across our full panel of insurers and advise you on the right option for your needs, not just the cheapest premium.

To get a quote, contact us directly and one of our brokers will assess your requirements.

In short term insurance, the policyholder is the person or entity who enters into the contract with the insurer and pays the premium. The policyholder owns the policy and is entitled to claim under it.

If your vehicle is financed, the finance company may be listed as an interested party on the policy, meaning they must be notified of any claim or cancellation. However, you remain the policyholder and are responsible for the premium.

In a business context, the business entity is typically the policyholder for commercial insurance, even if individual employees are covered under the policy for business use of vehicles or equipment.

Anyone who owns assets they could not easily afford to replace out of pocket needs short term insurance. This includes:

• Homeowners: to cover buildings and contents against fire, theft and damage
• Vehicle owners: to cover their car against accidents, theft and third-party liability
• Renters: to cover personal contents even if the building itself is the landlord’s responsibility
• Business owners: to cover commercial property, vehicles, equipment, liability and business interruption
• Self-employed individuals: to cover tools, equipment and professional liability

If losing or damaging an asset would cause significant financial hardship, that asset should be insured.

Short term insurance in South Africa is regulated by two primary bodies:

1. The Financial Sector Conduct Authority (FSCA): regulates the market conduct of insurers and financial services providers, including short term insurance brokers. All brokers must be licensed as Financial Services Providers (FSPs) under the Financial Advisory and Intermediary Services (FAIS) Act.
2. The Prudential Authority (PA), housed within the South African Reserve Bank: regulates the financial soundness and solvency of insurance companies.

Ambiton Financial Services is a licensed FSP and is fully FAIS compliant. Our licence details are available on request.

Yes. Short term insurance policies can generally be cancelled at any time by giving notice to your insurer or broker. The notice period and any refund of premium depends on the terms of your specific policy.

Before cancelling: consider whether you have replacement cover in place. A gap in cover, even for a short period, leaves you exposed to financial loss. If you are cancelling because of cost, speak to your broker first because it may be possible to adjust your cover, increase your excess, or find a more competitive premium without cancelling entirely.

In most cases, short term insurance payouts in South Africa are not subject to income tax because they are considered compensation for a loss rather than income. However, there are exceptions:

• If the payout exceeds the actual loss or the original cost of the asset, the excess may be subject to capital gains tax
• If a business claims the insurance premium as a tax-deductible expense, the corresponding insurance payout may be included in taxable income
• Business interruption insurance payouts, which replace lost revenue, are generally treated as taxable income

Tax treatment can be complex and depends on your specific circumstances. We recommend consulting a tax adviser for guidance on how a specific insurance payout affects your tax position.

Short term insurance premiums in South Africa are exempt from VAT under the Value Added Tax Act. This means no VAT is charged on your insurance premium.

However, certain ancillary services related to insurance such as broker advisory fees charged separately from the premium, may attract VAT. Your broker is required to clearly disclose all charges and their VAT status.

The Ombudsman for Short Term Insurance (OSTI) is an independent body that resolves disputes between policyholders and short term insurance companies in South Africa. It provides a free, impartial dispute resolution service for consumers who have been unable to resolve a complaint directly with their insurer.

The Ombudsman can investigate complaints relating to claim disputes, policy cancellations, premium disputes, and other matters arising from short term insurance policies. The service is free to policyholders and the Ombudsman’s rulings are binding on insurers up to a certain financial limit.

The OSTI can be contacted at:
Website: www.osti.co.za
Email: info@osti.co.za
Tel: 0860 726 890

Before approaching the Short Term Insurance Ombudsman (OSTI), you must first attempt to resolve your complaint directly with your insurer. If the insurer’s response is unsatisfactory or they fail to respond within a reasonable time, you can escalate to the OSTI.

To lodge a complaint with the OSTI:

1. Complete the official complaint form available at www.osti.co.za
2. Submit your complaint by email to info@osti.co.za or by post to their offices
3. Include all relevant documentation: your policy schedule, claim correspondence, and the insurer’s final response

At Ambiton, we assist our clients in navigating the complaints process and will advocate on your behalf if a claim dispute arises. Contact us before approaching the Ombudsman directly because in many cases we are able to resolve disputes without escalation.

Short term insurance in South Africa is governed by several pieces of legislation, primarily:

• The Short Term Insurance Act 53 of 1998: the principal legislation regulating short term insurance companies and the conduct of insurance business
• The Financial Advisory and Intermediary Services (FAIS) Act 37 of 2002: regulates financial services providers including short term insurance brokers
• The Financial Sector Regulation Act 9 of 2017 (the Twin Peaks Act): establishes the dual regulatory framework of the FSCA and Prudential Authority
• The Policyholder Protection Rules (PPRs): regulations that prescribe minimum standards for how insurers must treat policyholders

As a licensed FSP, Ambiton operates in full compliance with all applicable legislation and regulations.