Take a minute to imagine a world where, instead of paying premiums to a company, like us, you and your community pool your resources to insure each other. Seems like an odd idea, but actually, it isn’t as far-fetched as it sounds. In fact, there are a few names for it, including crowdsourced insurance and peer-to-peer insurance, and it appears that this approach to insurance is already emerging in certain parts of the world.
Are you curious about this and how realistic this kind of protection against the risks that life throws at us can be in a South African context? Us too. So, let’s take a cursory look at crowdsourced insurance.
What crowdsourced insurance is
Essentially, if we look at a peer-to-peer model, which is to say, a group of people with similar risks, then we’re talking about this group coming together to pool their money into a shared fund. Like, if you and your mates all own cars that are of a similar value. Then you would agree to each put in a set amount of money, either as a lump sum or as a monthly payment. You know… Like a monthly premium.
And then, when 1 of you gets into an accident or your car is stolen or there’s some kind of damage from a weather incident, you can dip into this community pot.
But… Why?
If we’re right in our thinking, the cash you need to repair or replace your car would come from the money you’ve all put in together. The whole point, from what we’ve seen, is to reduce fraud, increase trust, and save money.
The question is, could this work in South Africa? And if it’s such a good idea, then why isn’t everyone doing this for all the big things in life? Like, if a group of us wants to buy our own homes or have cash for medical expenses, then why are we bothering with home loans and medical aid?
Let’s explore this in more detail.
A closer look at the pros and cons
In a society where ubuntu, the spirit of collective care, runs deep, crowdsourced insurance seems like a natural fit. Seriously, consider a South Africa where farmers insure each others’ crops, or local drivers pool funds to manage road accidents.
But in reality, while the idea sounds utopian, crowdsourced insurance has challenges. It can be tricky to ensure that everyone contributes fairly, to create a clear enough understanding that protects the pool and ensures that money is paid out fairly, to decide what can and can’t be claimed for, and so much more. And then, what happens if the pool runs dry?
These are just some of the issues a South African model would need to tackle, and of course, we are already home to a few reputable insurance companies who have already launched affordable, innovative insurance policies to the market. Like us.
King Price has thought of all the logical inclusions that make up a variety of car, home, and business insurance policies. We’ve done the legwork, relied on our experience and the wisdom of industry pioneers (ahem, Mr Gideon Galloway himself), not to mention our re-insurers who insure us to make sure that we are always in the best position to serve you.
The king’s got your back, your bakkie, and your stuff
With fintech innovations and shifting consumer attitudes, crowdsourced insurance could play a smaller role. But for now, it makes the most financial sense to find premiums you can afford from an insurer you can trust to cover your valuables fairly and deal with your claims efficiently.
We’re talking about us. So, WhatsApp us on 0860 50 50 50 or click here for a commitment-free quote.
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Psst… This blog provides general info only, and doesn’t count as financial or product advice from King Price or our legal and compliance experts. Remember, all our premiums are risk-profile-dependent, and T’s and C’s apply. Our most up-to-date KPPD (policy wording) can always be found here.
Our website T’s and C’s can be found here.